Pakistan Economy - News & Updates - Archive

[Neo]

Rain and flood damage ​

Agri sector suffers Rs14 billion losses

ISLAMABAD: Besides numerous causalities, the rains and floods in Balochistan and Sindh have damaged livestock and crops worth Rs14 billion, reveals an official report made available with The News on Saturday.

Out of the total estimated loss of Rs14 billion, Balochistan suffered a loss of Rs13 billion to livestock, crops, orchards, watercourses, embankments and erosion of land, the report said.

In Sindh, the total damages to crops and livestock were estimated at Rs1.18 billion while crop damages in NWFP stood at Rs32 million. Similarly, torrential rains in Punjab completely devastated 15,825 acres of cotton.

According to estimates released in the official report, the Rs13 billion losses suffered in Balochistan include Rs10.68 billion damages to crops and irrigation courses, Rs3.26 billion worth of damage to cultivated area of 1,08,857 hectares, and Rs1.33 billion losses to orchards, Rs2.95 billion to watercourses and erosion of agriculture land was valued at Rs3.13 billion, the report added.

Similarly, livestock damages in Balochistan were estimated at Rs2.32 billion, as 0.9 million livestock were lost in the rains and floods in the province.

The number of heads that lost in the floods includes buffaloes (5,188), cattle (26,997), sheep (1,41,525), goats (1,22,042), horses (20), camel (2,690), donkeys (8,383) and poultry (6,04,589).

The calamity struck districts of Balochistan include Turbat, Gwadar, Panjgur, Lasbela, Khuzdar, Awaran, Kalat, Mastung, Kharan, Washuk, Nushki, Chagai, Bolan, Sibbi, Jhal Magsi, Nasirabad and Jaffarabad.

The people of Balochistan heavily depend on livestock for their livelihood but nearly one million heads were washed away in the heavy rains and floods adding misery to the woes of people already living much below the poverty line.

In Sindh losses to cash crops of cotton and rice were estimated at Rs231 million and Rs384 million respectively whereas loss of livestock stood at Rs563 million. The damages were reported in districts of Badin, Thatta, Dadu and Qambar Shahdad kot.

In NWFP the crop damages was reported at Rs32 million, 50 per cent of Tobacco crop worth Rs24 million was damaged while other crops like maize, vegetables, sugarcane, cotton, mellon, mung and sorghum were also damaged. Losses were reported in districts of Charsadda, Buner, D I Khan, Mansehra and Noshera.

Nearly 15,825 acres of cotton crop was lost due to rain and floods in Punjab while no loss of livestock was reported in Punjab.

http://www.thenews.com.pk/daily_detail.asp?id=66105

 

[Neo]

Coal-fired power plants ​

SCA suggests lucrative tariff to woo investors

KARACHI: The Sindh Coal Authority (SCA) has asked the federal government to fix an upfront tariff of at least 8 cents per kilowatt hour (kWh) for energy produced by coal-fired power plants, an official told The News on Saturday.

The benchmark price will help woo investors toward utilisation of an estimated 175.5 billion tonnes of Thar coal reserves, located 380km east from here in Tharparkar district.

“We have to give them some incentives, something concrete, otherwise, I don’t think anyone would find their investments feasible,” said the official, recalling that a Chinese company had pulled out of a billion-dollar project after failing to get a reasonable power tariff.

Shenhua Group Corporation of China (SGCC) was disallowed 5.7 cents per kWh when it was just days away from starting work on the power plant that would have marked first time usage of Thar coal reserves since they were discovered in 1992.

“That was in January 2005. Now authorities are willing to purchase power from wind turbine farms for as much as 13 cents,” said the official requesting not to be named.

A benchmark tariff could also encourage another Chinese firm in its endeavour to generate power by excavating coal from Sonda Jerruk, situated near Thatta district.

China Machinery Import Export Corporation (CMC) late last year signed an agreement with the Sindh government to carry out a detailed geological survey of Sonda-Jherruk coalfield, renewing hopes for a long-awaited breakthrough in coal-based power generation.

Sonda Jerrukh coalfield, located 100km east of Karachi, holds significance compared to all other coalfields in the province because of its close proximity to two major cities and a relatively good chemical composition of its coal.

The area has a limited estimated coal reserve of 7.1 billion tonnes but does not face water-scarcity like Thar.

According to energy experts, Pakistan is faced with a severe energy crisis as continuous depletion of domestic gas reserves necessitates excessive imports of furnace oil at unpredictable prices.

Private Power and Infrastructure Board (PPIB) had already allowed two foreign companies to prepare a feasibility study on power generation from imported coal in lieu of oil.

http://www.thenews.com.pk/daily_detail.asp?id=66107

 

[Neo]

Russia hints at lifting ban on Pakistani rice ​

KARACHI: Russia has hinted at lifting the import ban on Pakistani rice and mangoes as a formal notification is likely to be issued during the visit of a Pakistani delegation to Russia in the second week of August.

The Russian government had invited Pakistani authorities for negotiation with the Russian Federal Veterinary and Phytosanitary Surveillance Services (VPSS)in order to sort out quality problems of Pakistani agri and horticulture products, a source in rice trade said.

A Pakistani delegation comprising Federal Rice Commissioner Inayatullah Khan, the Commissioner Minor Crops (Fruits), officials of the Pakistan Quarantine Department, Chairman of the Rice Exporters Association of Pakistan (REAP) Aziz Maniya and Chairman of the Fruits & Vegetables Exporters Association Abdul Wahid Memon is to leave for Moscow on Aug 12. Earlier, the delegation was to leave on Aug 8.

Rice exporters are hopeful that Russia may formally announced elimination of the ban in the same manner as it had lifted the ban on Indian rice last week and has been issuing quarantine import certificates from July 20.

Russia’s phytosanitary watchdog imposed a total ban on rice import from Pakistan for the alleged reason of “Khapra Beetle,” an insect that was found in a rice shipment sent from Pakistan to Russia and subsequent imposition of ban on the import of Pakistani rice in December 2006.

Before this Russia had imposed ban on the import of rice from India and Vietnam way back in December 2006 and on June 20 it had the extended ban on India after they found pesticides and other impurities in several consignments. Moscow had claimed that last year up to 12 per cent rice imported from India did not meet the Russian phytosanitary norms.

In the last week of April this year a high-level VPSS delegation had visited Pakistan to discussed phytostanitary issues with Pakistani stakeholders and had held meetings with members of REAP. They had also checked rice storage sites and processing facilities in Pakistan.

REAP members is of the views that the “Khapra Beetle” was primarily found in wheat stocks and there is a possibility that the rice shipped to Russia was stocked close to a wheat godown.

According to the sources, the Pakistani rice was cleared from the port but later it was lifted from shelves on account of “Khapra Beetle” infection.

Russia used to import o.4- 0.5 million tonnes of rice a year until it imposed a tariff of 70 euros ($92.32) a tonne in April 2005 which shrank its rice imports to 0.15 - 0.2 million tonnes after that. Before the end of the last calendar year, Russia had stopped all rice imports on health grounds but had promised to resume imports later under stricter control through a reduced number of ports. India is the main rice supplier to Russia followed by China, Vietnam and Thailand.

If the ban is lifted, then Pakistani exporters would be able to dispatch 20,000 tonnes of rice to Russia. REAP sources said the delegation’s visit would provide them an opportunity to be in direct contact with Russian buyers as earlier they had to rely on brokers, mainly from India and UAE.

http://www.thenews.com.pk/daily_detail.asp?id=66108

 

[Neo]

‘Thar has great potential to meet Karachi’s milk, meat requirements’ ​

PM's programme to double the number of goats; the area needs more vets

MITHI: The destiny of the impoverished people of Tharparkar will change drastically if the Prime Minister’s Special Initiative for Livestock succeeds, according to Dr Jaimal Dhanani, a former professor of embryology at Tando Jam Agricultural University.

“The desert boasts of the majestic Tharparkar breed of cow that is heat and drought resistant and provides 10kgs of milk daily,” he told The News.

He said the population of Tharparkar breed cows in Tharparkar is about 100,000 but the number is declining because of a small number of breeding bulls. “Farmers take cows of the Tharparkar breed to distant places for breeding and this also affects their heat period,” said Prof Dhanani, who is also project coordinator of the PM’s Special Initiative for Livestock.

He said the breed is indigenous to Tharparkar from where it went to the Indian state of Gujarat and even Australia where it was named Brahman.

The Tharparkar cow, a Bos indicus breed used for milk production and as draught animal, came into prominence during World War I when some animals were taken to supply milk for the Near East army camps. Here their capacity for production under rigorous feeding and despite unfavourable environmental conditions at once became apparent.

Since then, many breeding herds have been assembled in India and Pakistan. When left on arid pasture, the milk production is around 1,135kg per lactation, while those animals maintained in villages average about 1,980kg.

The average animals of the Tharparkar breed are sturdy, strongly built, medium sized, with straight limbs and good feet, and with an alert and springy carriage. The usual colour of the cattle is white or gray. In males, the gray colour may deepen, particularly on the fore and hind quarters. All along the backbone there is a light gray stripe. The colour of the cattle deepens during the winter months and also when cows are pregnant.

Prof Dhanani said human, animal ratio in Tharparkar was almost 1:5. The human population, he went on to say, was 1.3 million whereas there were five million animals, including 2.5 million goats and 1.5 million sheep.

“The Prime Minister’s Special Initiative for Livestock envisages that the goat population in Tharparkar should be doubled in the next five years to meet the increasing demand for meat and milk.”

Elaborating, he said the importance of livestock in the area can be gauged from the fact that about 50 trucks carrying 2,000 goats are transported from Tharparkar to Karachi every day.

He said even President General Pervez Musharraf has realised the importance of “embryo transfer,” but deplored that about one million goats die every year in Tharparkar from disease and shortage of veterinary doctors. But since they breed two kids on an average every year, their population is increasing, he hastened to add.

“For every 20,000 animals there should be one veterinary doctor. India is meeting the target. But there were only 10 veterinary doctors in Thar in 2006, while in the year 2007 their number increased to 10 in the government sector and 26 under the PM’s programme,” he said.

He said the PM’s initiative envisages fattening of animals and 500 rupees will be given to the owner for every fattened goat. But it seems there is a lack of interest in the fattening programme in Tharparkar, he added.

“The Prime Minister's Special Initiative for Livestock has received only 40 applications in Tharparkar so far as compared with 400,000 applications in Punjab, essentially because there is more awareness in Punjab.”

He said it is high time that entrepreneurs in Karachi made an investment in the livestock sector in Tharparkar. “The minimum investment for a small farm with 100 goats is not more than Rs one million,” he added. He deplored that livestock is being imported from India but nobody is ready to invest in this area in Pakistan.

http://www.thenews.com.pk/daily_detail.asp?id=66112

 

[Neo]

Food exports up 1.24pc ​

KARACHI: The total exports of food group recorded a marginal rise of 1.24 per cent to $2,036.820 million during last fiscal 2006-07 which was recorded $2,011.805 million during 2005-06.

During July-June 2006-07 the overall exports of rice recorded 3.11 percent decline in tem of value and 15.35 percent in term of quantity.

The figures released by Federal Bureau of Statistics (FBS) on Saturday depicted that exporters dispatched total 3.122 million tonnes of rice to different destinations of fetched $1,121.773 million as export proceeds during fiscal 2006-07 as compared to this they had exported 3.68 million tonnes of rice valued $1,157.614 million during last fiscal.

Exports of prime quality Basmati rice recorded 11.13 percent increase in term of quantity and 16.96 percent in term of value. From July- June 2006-07 exporters dispatched 0.932 million tonnes of Basmati rice worth $560.809 million against this they had shipped 0.839 million tonnes and fetched $479.616 million as foreign exchange during fiscal 2005-06.

The export of other varieties of rice including Irri-6 recorded sharp decline of 17.31 percent in term of value and 23.14 percent in term of quantity.

From July -June 2006-07 exporters could hardly dispatched 2.190 million tonnes of coarse varieties of rice worth $560.809 million as compared they had exported 2.84 million tonnes of worth $678.198 million in fiscal 2005-06.

Similarly exports of fish and fish preparations recorded 3.01 percent fall to $188.313 million against $194.157 million of last fiscal, whereas exports of the fruits also witnessed 9.94 percent decline to $336.012 percent from $455.33 million of fiscal 2005-06.

The vegetable exports recorded a substantial rise of 80.35 percent to $194.715 million which stood around $125.451 million a year before, while leguminous vegetables recorded sharp decline by 90.02 percent to $16.052 million from $199.080 million.

Moreover exports of tobacco surged by 46.56 percent to $5.907 million, which was recorded only $0.365 million in fiscal 2005-06, while wheat exports increased by 100 percent to $224.630 million. The exports of spices recorded a marginal increase of 0.36 percent to $23.635 million from $23.550 million, whereas exports oil seeds, nuts increased by 62.31 percent to $24.069 million from $11.105 million.

The significant rise was witnessed in the exports of meat and meat preparation, which put local consumers under pressure.

From July - June 2006-07 exporters sent 15.125 million tonnes of meat and meat preparation and fetched $41.722 million against $18.950 million of last fiscal.

http://www.thenews.com.pk/daily_detail.asp?id=66114

 

[Neo]

Commercial exporters grab lion’s share: Rebate for textile​

KARACHI, July 28: A Swiss-based internationally known consultancy firm — Gherzi — has proposed to ensure that the 6 per cent research and development rebate on textile exports should be given only to the manufacturing companies so that it could be used only for the purpose it was intended for and that textile industry has little R&D including new product development.

This proposal has apparently been made after it was found that the commercial textile exporters have grabbed the lion share of more than Rs 20 billion R&D rebate given by the government at the rate of 6 per cent, 5 per cent and 3 per cent on export of garments and home textile, respectively, for last two years while the manufacturing companies got a very small share.

Gherzi observes that in all probability the R&D rebate is passed on to the buyers as discounts to get sales. It is unlikely that the subsidy is used for the R&D purpose. “Can the rules be changed?,” the study raises a pertinent question.

The report observed Pakistan’s performance in clothing export as “disappointing”. With so much to offer in terms of local cotton and competitive labour, the export performance is poor.

A sad reflection of Gherzi’s report is Pakistan’s textile export performance in the year 2006-07, which has decelerated to hardly 5 per cent plus from 14 per cent annual growth a few years ago. Latest trade figures for the year 2006-07 shows that import of textile machinery is down by more than 38 per cent to about $503 million indicating that the allocation of about Rs50 billion bank loans on concession rate of 7.5 per cent since May 2004 has failed to motivate textile barons to invest for improving their production capacities.

Under this scheme, the textile tycoons swapped Rs34 billion loans they had obtained on 12 to 14 per cent rate to 7.5 per cent. Fresh financing of Rs15 billion to textile industry under long-term financing for export- oriented projects (LTF-EOP) were provided according to the information given by the Federal Commerce Minister Humayun Akhtar Khan in his budget speech on July 18, 2007.

No firm figures are available but a rough estimate shows that conversion of Rs34 billion bank loans from 12 per cent to 7.5 per cent interest bank loans and grant of fresh Rs15 billion loans to the textile industry would cost anywhere from Rs1.5 billion to Rs2 billion to the State Bank of Pakistan. Add to this, the cost on export refinance, which too is being offered on 7.5 per cent interest.

Gherzi was asked by the textile ministry to give an assessment of the situation that has emerged after the quota phase-out in terms of countries that have gained and those who have suffered with special reference to Pakistan. The report was given in March this year.

The textile companies - that export directly - are found to be more attractive and reliable by the foreign buyers as suppliers than those manufacturing companies that depend on commercial exporters.

However, in spite of having a direct involvement in the markets, many Pakistani companies are seem contented to serve the lower, highly price sensitive price segment of the market with basic products,” the report notes.

As for those textile manufacturing companies that depend on commercial exporters for market access, the report declares in clear words: “These companies are unlikely to be in control of their destinies as they are beholden to the commercial exporters.”

They are unlikely to have correct management structures and modern equipment. They are certain to be under persistent price pressures and without product development that enable them to become direct exporters.

Pakistan’s share in world textile exports is observed to have been increased from 2.58 per cent in 1990 to 3.45 per cent in 2005. On the face of it, this appears to be a positive growth.

However, the report says the growth in Pakistan’s textile exports have come mainly from increased sales of cotton yarn and woven grey fabrics, which are intermediary products of minimal value addition, that are imported by companies in other countries to convert into products of higher value addition.Similarly, in world’s clothing trade, Pakistan’s share has increased from 0.94 per cent in 1990 to 1.31 per cent in 2005 by value. Clothing and home textiles are key, labour intensive sectors where Pakistan should have comparative advantages. These advantages have not been exploited to the full potential.

Gherzi suggests setting in place a clearly identified comprehensive strategy for the industry on which all stakeholders should agree to ensure its smooth implementation.

http://www.dawn.com/2007/07/29/ebr1.htm

 

[Neo]

Textile machinery imports down by 38 per cent​

ISLAMABAD, July 28: Export of textile and clothing products rose to $10.757 billion in the year 2006-07 as against $10.218 billion over the last year, indicating a marginal increase of 5.27 per cent.

The slow growth in textile and clothing sector was recorded owing to decline in export of raw cotton, cotton cloth and bed wear during the year under review. However, the government had announced a relief package of subsidies for the sector to make their prices competitive in international market.

It has been observed that Pakistan offered the lowest unit price for its textile and clothing products even lesser than Bangladesh, India, China in international market during the year under review but despite this the growth in exports to these countries remained stagnant.

Another disturbing aspect is the massive decline in import of textile related machinery, which stood at $502.971 million during the year 2006-07 as against $817.240 million over the last year, indicating a negative growth of 38.45 per cent.

It showed that pace of modernisation of textile sector or enhancing the production capacity has been stagnated for the last couple of years. However, the core issue of diversification of products and reducing of the cost of doing business still remain un-resolved to make the manufactured products more competitive.

Detailed analysis of the commodities export released here on Saturday by Federal Bureau of Statistics (FBS) showed that export of readymade garments witnessed a growth of 5.32 per cent to $1.379 billion during the year 2006-07 as against $1.309 billion over the same period of the last year.

Statistics showed that export of knitwear also recorded a growth of 12.17 per cent during the year under review to $1.964 billion as against $1.751 billion over the same period of the last year. The export of cotton yarn reached $1.425 billion in the year 2006-07 as against $1.382 billion over the same year of last year, indicating a growth of 3.10 per cent.

The export of bed wear dipped by 3.90 per cent to $1.958 billion during the year as against $2.038 billion over the last year and cotton cloth by 4.30 per cent to $2.017 billion as against $2.108 billion over the last year.

A marginal growth of 1.25 per cent was recorded in export of towels to $595.012 million during this fiscal as against $587.641 million over the last year and 3.10 per cent in export of cotton yarn to $1.425 million as against $1.382 million during the year under review.

The export of raw cotton declined by 25.58 per cent to $50.720 million during the year as against $68.151 million over the last year. However, export of cotton carded increased by 24.33 per cent to $12.854 million as against $10.339 million; 82.92 per cent in yarn other than cotton yarn to $67.673m as against $36.996 million; 77.53 per cent in tents, canvas to $69.061 million as against $38.902 million; 114.55 per cent in art, silk and synthetic textile to $429.761 million as against $200.308 million; 13.4 per cent in madeup article to $473.893 million as against $417.877 million and other textile materials 16.53 per cent to $312.098 million as against $267.837 million.

http://www.dawn.com/2007/07/29/ebr2.htm

 

[Neo]

Outflow of foreign exchange up 60pc: Dividends, profits​

KARACHI, July 28: Outflow of foreign exchange in the form of profits and dividends has sharply increased by 60 per cent during the fiscal 2006-7 turning the foreign investment into a liability for the country.

Despite high reserves of foreign exchange, the country is struggling to meet the widening trade deficit, which reached $13.54 billion last year making the issue of foreign exchange outflow more crucial for the country.

Pakistan witnessed an outflow of $804 million (Rs48.240 billion) as profits and dividends during the last fiscal ended on June 30.

The outflow is the direct impact of foreign investment as a number of companies are either acquired by the foreign investors or they became majority share holders.

The policy makers have put no restriction on the outflow of profits and dividends from the country even 100 per cent investment can be taken out without any restriction.

The biggest outflow was noted in telecommunications sector and about $151m (Rs9 billion) went abroad as profits and dividends.

The telecom is also the sector, which attracted highest foreign investment of about $1.4bn but the forex outflow was almost same in the form of import of mobile phones and related apparatus.

Power appeared as another important sector, which witnessed an outflow of $136m (Rs8.160 billion) during the same year.

The sector is expected to see heavy investment in the coming years as the country is facing serious shortage and the government is planning to attract more independent power projects to meet the rising demand. This foreign investment would further increase the outflow of foreign exchange from the country.

Along with the power sector the banking also received heavy investment and a number of take-over and mergers were witnessed during the year just ended.

An outflow of $116 million (Rs7 billion) went abroad as profits and dividends from the banking sector. Banks have been making record profits for last four years and the growth in this sector is expected to continue and this will further increase the outflow.

Recently, foreign investors have shown interest to acquire Saudi Pak Commercial Bank and the acquisition could cause more outflows from the country.

Chemicals sector saw an outflow of $53 million, pharmaceuticals $51.8 million, petroleum refining $48.7 million, oil and gas exploration $44.8 million and food $38.8 million.

The privatisation has been a major reason for large share holdings of the foreign investors. The government has a list of some giant organisations to be offered to the foreign investors. These included Pakistan State Oil, Sui Northern Gas, Sui Southern Gas, Pakistan Steel, PIA and stakes in OGDCL and PTCL, etc.

If the foreign investors acquire majority shares in these companies, the country would face a serious problem to arrange foreign exchange for the outflow of profits and dividends.

Analysts said that after privatisation of above units, not only the outflows would acquire a difficult shape but the country would be left without other source to improve its foreign exchange reserves.

http://www.dawn.com/2007/07/29/ebr4.htm

 

[Neo]

Petroleum imports up by 9.96pc in 2006-07​

ISLAMABAD, July 28: Pakistan spent a hefty sum of $7.339 billion on import of petroleum products during 2006-07, showing an expansion of 9.96 per cent over the previous year’s figure of $6.674 billion.

Official figures released by Federal Bureau of Statistics (FBS) on Saturday showed that the share of petroleum products in total import bill also rose to 24 per cent during the year under review as against 23.3 per cent the previous year.

The statistic showed that the import of products manufactured from petroleum increased by 29.59 per cent to $3.773 billion in 2006-07 as against $2.880 billion a year earlier.

However, the growth in imports of petroleum crude declined by 4.94 per cent to $3.605 billion as against $3.793 billion in 2005-06.

The second biggest component of the import bill in value was the machinery group. However, its imports increased by 8.82 per cent to $6.605 billion in 2006-07 as against $6.07 billion of previous year. The import bill of machinery mainly pushed by an increase of 38.09 per cent in power generating machinery, office machines 5.04pc, construction machinery 16.85pc and agriculture machinery 34.19pc.

In the telecom sector, the import of mobile phones increased by 12.64 per cent and other apparatus 10.80 per cent during the year under review.

http://www.dawn.com/2007/07/29/ebr10.htm

 

[Neo]

FPCCI to participate in several trade fairs​

KARACHI, July 28: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) must explore new markets to boost the country's exports. This was stated by FPCCI President Tanvir Ahmed Sheikh at a meeting of the standing committee of Fairs and Exhibitions held at Federation House on Saturday.

He urged the committee members to explore new markets by participating in exhibitions and fairs worldwide.

He noted that fairs and exhibitions were the modern tools for promoting country's exports and for projecting the export potential in the international market.

He appreciated the efforts of the committee and emphasised that the participants of trade fairs should concentrate on long-term business, which is the real objective. On this occasion Tariq Sayeed, the former president of FPCCl said that the Trade Development Authority of Pakistan should provide subsidy to all trade bodies, including the FPCCI on all allocated fairs and exhibitions.

Earlier, Chairman of the committee Farooq Ahmed Sheikh said that the FPCCI will participate in a large number of fairs and exhibitions during 2007-08 which have been allocated by the TDAP.

He said that the FPCCl was coordinating with the TDAP and will follow its guidelines and ensure transparency in the entire process of fairs and provide all possible assistance to the participants for achieving fruitful results.

He said that special incentives will be given to new exporters, SMEs, women entrepreneurs and manufacturers of remote areas who want to export their goods as a direct exporter.

Tanvir Sheikh also distributed cheques of subsidy amongst the participants of IITF-2005. —APP

http://www.dawn.com/2007/07/29/ebr12.htm

 

[Neo]

ADB to help reform Pakistan Strategic Energy Plan 2009-29​

ISLAMABAD: The Asian Development Bank (ADB) would help government of Pakistan to develop within one year and help implementing Pakistan Strategic Energy Plan 2009-2029. The plan would also help establish new Pakistan energy planning unit to meet the future challenges.

The ADB would finance the hiring of international consultants, which would be completed in August 2007 to help Pakistan review the existing sectoral energy policies and strategies and recommend measures in the shape of final report on Pakistan Strategic Energy Plan.

According to an ADB document, relating to the project and terms of reference of the international consultants, the project is to assist the government of Pakistan to establish an integrated energy model for analysing the impacts of various strategies for meeting energy requirements. Financial, economic, energy supply, national resources, energy use, environment impacts, technologies, energy efficiencies, and socio political impacts would be among the factors to be addressed.

The services of an international consultant supported by local consultant would review the existing data across Pakistan’s energy sector. This will include economic, financial and technical data on (i) import and domestic energy supplies of all sources, (ii) energy consumption by sector and by type, and (iii) environmental, efficiency and sociopolitical matters.

Based on findings of the said review, also to review and evaluate and extract the lesson learned by countries similarly situated as Pakistan who have used energy planning and optimisation model. This would also include review of Pakistan’s energy sector institutional framework and identify appropriate institutional locations and reporting arrangements of energy planning team.

The consultant would also identify the leading energy models that are available in the international marketplace for national energy planning. Based on Pakistan’s needs, identify the advantages of various model types. Also to assist in developing energy model procurement by the developing tender documents to be issued to pre-qualified energy suppliers. The consultant would also coach the counterpart team to ensure a functional energy-planning unit is in existence on the completion of his contract.

According to the assignments to be given to a team of international consultants, consultant on energy economics would act as team leader and manage the project from inception to completion. Engineer or Economist on Energy Supply Power would give input on technologies and financials of power technologies used in Pakistan and in developed countries. Engineer or Economist on Coal would provide input of reserve assessment, technologies used and financials of coal supply options. Engineer or Economist on Oil and Gas would also provide input on reserve assessment, technologies used and financials of oil and gas technologies being used in Pakistan. An engineer with experience in oil and gas and power demand supply analysis would provide input on technologies and financials of power and oil and gas sectors. An engineer with experience in energy transport analysis would provide input on technologies and financials of energy transport sector in Pakistan. He will also ensure adequacy of input data across and address demand side management and energy efficiency standards. An engineer or economist with experience in environment standards and renewable technologies would provide input to address the issue of carbon intensity in Pakistan. An economist on financial issues would assess the impacts of government of Pakistan’s financial policies on the energy sector and would ensure their integration into new energy model.

http://www.dailytimes.com.pk/default.asp?page=2007\07\29\story_29-7-2007_pg5_2

 

[Neo]

Check bank accounts, pay utility bills through mobiles soon​

* Citibank and UBL in testing process

KARACHI: Two mobiles operators in Pakistan are planning to launch mobile banking in next few weeks, which may help the customers to check banks’ accounts and pay their utility bills etc through their hand-set.

“In collaboration with banks, the mobile companies are focusing on the advancement of mobile banking, empowering consumers with convenient, flexible and innovative mobile payment options,” sources in the banking sector told Daily Times. This service provides facility to the mobile phone subscriber to pay their bills through handset anywhere at any time. Initially Citibank and UBL are in the testing process, sources added.

The service will enable customers to do away with keeping their credit cards and cash with them and will also ensure secure transfer of funds from one account to the other. The aim is to help customers in doing away with physically going to banks or utility companies for the payment of services.

To avail this service the mobile user must have a mobile phone equipped with General Packet Radio Service (GPRS) technology available to users of Global System for Mobile Communications (GSM).

The service offers a secure infrastructure for financial transaction over wireless network and physical security of the hand-held device. If the bank is offering smart-card based security, the physical security of the device is more important. Security of the thick-client application running on the device. In case the device is stolen, the hacker should require ID or password to access the application.

Mobile Commerce Solution would enable mobile users to charge for site content as well as goods and services purchased over the Mobile Internet. The platform includes modules for access, payment and security. It enables network operators and service providers to offer secure payment services for mobile commerce transactions making it easy for content providers and application developers to create valuable services for end-users. These could include banking, trading, ticketing, shopping.

According to a study by financial consultancy Celent, 35 percent of online banking households will be using mobile banking by 2010, up from less than 1 percent today. Upwards of 70 percent of bank centre call volume is projected to come from mobile phones. Mobile banking will eventually allow users to make payments at the physical point of sale.

http://www.dailytimes.com.pk/default.asp?page=2007\07\29\story_29-7-2007_pg5_3

 

[Neo]

3 modern dates processing plants to be ready by 2008​

KARACHI: Three modern dates processing plants under the trade policy would be ready by year-end, one each in Sindh, Balochistan and North Western Frontier Province (NWFP) with a cost of Rs 78.6 million, the dates exporters said on Saturday.

Pakistan Horticulture Development and Exports Board (PHDEB) is ready to invite tenders for construction of dates processing plant at Khairpur at the cost of Rs 24.113 million by 2008.

The tenders for two other plants, one each at Dera Ismail Khan and Turbat will be floated within the couple of months, an official in PHDEB said.

The work on Khairpur plant is underway to hold bidding for ‘up-to-the-mark’ plant, which would be established on public private partnership (PPP) basis, an exporter, Jawed Khan said.

He said these plants are being built along with cold storage facilities. Pakistan with an estimated 622.1 thousand tonnes annual production ranks fourth in dates production and fifth in its exports around the world.

Under PPP, the Sindh government has provided two acres of land for this purpose. The Sindh government also released Rs 19.946 million from the Export Development Fund (EDF) and would take care of the cost of plant machinery, equipment, vehicles and other civil works.

Mr Khan said day-to-day operations would be entrusted to a team of professionals hired from the private sector, which would also contribute the working capital around Rs 4.167 million while a private limited company had also been formed to accomplish the management work of the plant, which was named as Khairpur Dates Processing Plant (KDPP).

The company, duly registered with the Securities and Exchange Commission of Pakistan (SECP), would have its members from PHDEB, Trade Development Authority of Pakistan, Agriculture Research Institute, DRC, Kot Digi, Khiarpur Chamber of Commerce and Industry and investors and growers from the private sector of Khairpur.

The board had set 2008 as a deadline for completion of the KDPP, which would produce an estimated 2,000 tonnes of processed dates during the 150 working days.

He said the KDPP, for which funds had been transferred to account of the company, would be built to improve the quality of dates and increase the level of value addition. The proposed plant would be based on multiple products including pitted and stuffed dates and would increase the level of value addition.

http://www.dailytimes.com.pk/default.asp?page=2007\07\29\story_29-7-2007_pg5_5

 

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2nd generation policy reforms to upgrade 6 sectors​

ISLAMABAD: Second generation policy reforms introduced in the budget 2007-08 would help six important sectors—gems and jewelry, horticulture, furniture, marble and granite, surgical instrument and medical devices— be competitive locally as well as globally.

A senior tax official informed Daily Times that Pakistan Initiative for Strategic Development and Competitiveness (PISDAC) was launched by the government of Pakistan to develop a public private sector dialogue to identify Second Generation Policy Reforms that could encourage the private sector to invest and to upgrade itself to become more competitive both domestically and globally.

Special Working Groups constituted by PISDAC in the said sectors have identified initiatives to focus on overcoming gaps on workforce development. To bolster these initiatives, each SWG has identified second generation policy reforms which have been supported by ministries of Industries, Commerce, Engineering Development Board and SMEDA.

Gems and Jewelry: Pakistan lacks adequate testing facilities for gems and jewelry and SWG has developed a strategy that highlights the need for such facilities to be established and equipped with latest world class equipments. In the budget, customs duty on import of seven said equipments and instruments for testing facilities have been exempted.

Furniture: Furniture Strategy Working Group focused upon availability of quality inputs and lowering the cost of production. In the budget 2007-08, inputs have been identified on which the duty rates have been reduced or eliminated. This policy measure would provide an incentive for greater import of wood and would lessen the pressure on its indigenous supply sources. These measures would enable this sector to increase its production coupled with its comparatively lower labour cost would allow it to increase exports and become competitive internationally.

Marble and Granite: Quarrying techniques in Pakistani quarries are primitive. Majority of mines basic machinery and equipments like compressors, saws, drill sets, hoists, jacks, lifters and rock excavating or hoisting and transporting vehicles are not available. This not only leads to colossal wastage of 73 percent but also to low production at mines. Upon recommendations of the Strategy Working Group on this sector duty has been exempted on machinery and equipments required to develop this sector in the budget 20070-8. This measure would help this sector to develop and up-grade itself on modern footing and would also help reduce the wastage and increase efficiency.

Horticulture: Nearly all of the Pakistani fruits and vegetable crop volume is based on old cultivators introduced years ago. There is a noticeable absence of more recently developed modern cultivators. One reason for this is the lack of indigenous research program on horticulture. According to the recommendations of the Strategic Working Group on horticulture duty has been reduced or exempted on import of soluble fertilizer, insecticides, pesticides, plant growth regulators, pruning equipments. This measure would improve production as well as quality, which would be beneficial for both domestic and international markets.

Surgical and Medical Devices: The Strategy Working Group on surgical instruments and medical devices had pointed out that this sector is facing stiff international competition. Based on SWG’s recommendations a list of items and equipments required to develop this sector on modern lines was developed and the government has rationalised the duty rates on their imports. This measure would result in capacity building of this sector to enhance its competitiveness and increase its exports.

http://www.dailytimes.com.pk/default.asp?page=2007\07\29\story_29-7-2007_pg5_12

 

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Fiscal year 2007 economic targets missed: SBP and FBS unanimous in their figures ​

KARACHI (July 30 2007): The government once again suffered a setback, as the country missed its major economic targets, including food inflation, large scale manufacturing, current account deficit, trade deficit, exports, and private sector credit during the last fiscal year due mainly to unsustainable policies.

The final report on the country's economy by the State Bank of Pakistan (SBP) is expected next month, in which final figures regarding economy performance and other fundamental reasons will be explained. However, the official figurers released by the SBP and the Federal Bureau of Statistics (FBS) show that major economic targets were not achieved during last fiscal year.

The country has missed its current account deficit target, which usually shows the overall position of the country's inflows and outflows payments. In the last fiscal year, the current account deficit widened by 40 percent to 4.8 percent of the gross domestic production (GDP) and all-time high level of seven billion dollars.

The government had set the current account deficit target at 4.3 percent of the GDP, however, for the first time in the history of the country, the current account deficit reached 4.8 percent of the GDP against the target of 4.3 percent in FY07.

The SBP statistics show during the last fiscal year, the country's current account deficit went up by $ 2.026 billion, as a result it reached new peak of $ 7.016 billion at the end of the last fiscal year while it stood at $ 4.99 billion in FY06. "Failure in achieving export target is the main cause of the widening current account deficit, besides widening trade deficit, services deficit and tremendous raised in income deficit during the last fiscal year", analysts said.

The other major key target missed during last fiscal year is export target, which is also a main factor for widening the current account deficit.

The country fell short of its export target of $ 18.6 billion by $ 1.6 billion, as overall exports stood at $ 17.01 billion during the last fiscal yea. However, for the first time in the country's history, exports crossed $ 17 billion mark.

"The country's cost of doing business remained much higher than the other regional countries, including India and Bangladesh, which have put a negative impact on the export," exporters said.

Due to the rising import of the country also missed its trade deficit target of $ 9.4 billion during last fiscal year. The trade deficit grew by 11.53 percent to highest ever level of $ 13.528 billion in the last fiscal year as against the $ 12.12 billion in FY06, depicting an increase of $ 1.399 billion.

In the last fiscal year, the imports of luxury items raised imports bill to $ 30.54 billion as compared to $ 28.58 billion in FY06, witnessing an increase of 6.85 percent or $ 1.96 billion.

The Large Scale Manufacturing (LSM) is the second largest sector of the economy accounting for over 20 percent of GDP showed the poor performance in last fiscal year. Its growth target of 13 percent missed by 4 percent during the last fiscal year, in the wake of high interest rates and increasing cost of doing business in the country. Statistics shows that LSM growth has been declining for last three years due to high interest rates, besides increasing cost of production.

In last fiscal year, country's foreign debt also increased by two billion dollars to 39.265 billion dollars against 37.265 billion dollars in FY06. While the domestic debt also swelled by Rs 160.754 billion to Rs 2,457.650 billion from Rs 2,296.896 billion in FY06. The budgetary deficit also widened to 4.5 percent of GDP from 4.20 percent, depicting an upsurge of 30 basic points in last fiscal year.

Huge liquidity also depreciated the rupee by 20 pisa against the dollar during last fiscal year. Now it is being traded at Rs 60.40 per dollar as compared to Rs 60.20 per dollar previously.

The rising inflation was a major threat for the economy, therefore, the SBP adopted a tight monetary policy to control the inflation besides, liquidity in the market. Another key challenge for the economy was to reduce the money supply growth, which was also missed by 1-2 percent. The set target of money supply growth for the last fiscal year was 13.5 percent, however, it is estimated that its growth would be 14.5-15.5 percent.

The SBP statistics shows that overall the country earned $ 4.125 billion against the payments of $ 8.250 billion in the account of services trade, including transportation, travel, royalties, insurance, financial during last fiscal year, depicting a 50 percent or $ 4.125 billion deficit.

"Travel advised by different countries for Pakistan, law and order situation, high cost of doing business and electricity shortage are the major reason in the failure of achievement of economic targets," said economist Shahid Hussian.

He said the tight monetary policy e also put negative effect on the economy targets and Commerce Minister Hamayun Khan also identified this matter in the new trade policy.

Regarding achievement of GDP growth target of 7 percent, he said this has happened due to the good performance of services sector specially banking, insurance, besides the agriculture sector. "The export targets were on real basis, however, these were not achieved due to poor performance of textile sector due to higher production cost," he said.

Shahid Hussian said despite the all-time high foreign investment no green filed investment was witnessed in the industry, as the foreign investors invested in the existing business in the Pakistan.

Single largest sector of the national economy "agriculture" made a modest recovery from the dismal performance of last year, as overall agriculture grew by 5 percent in FY07.

The impressive growth in major crops owes partly to the bumper wheat and sugarcane crops and partly to the base effect as it is measured from a low base of last year. Wheat production was up by 10.5 percent to 23.5 million tonnes, the highest ever wheat production recorded in the country's history.

Sugarcane production improved by 22.6 percent last year to 54.8 million tonne- the second highest size of the crop in the country's history. While the third largest crop cotton has missed its production and overall production stood at 12.5 million bales against the target of 13 million bales last fiscal year.

In addition, two other major crops, rice and maize did not perform well. Both rice and maize registered negative growth rates of 2 percent and 4.5 percent, respectively.

In the last fiscal year, some of new records were made including all-time high level of foreign investment, workers remittances and foreign reserves. With 3.39 billion dollars upsurge the overall foreign investment touched all-time high level of 8.416 billion dollars, including 5.125 billion dollars foreign direct investment against the target of $ 6 billion.

Workers remittance also touched new peak, as the country received ever-highest workers' remittances over $ 5.493 billion in the last fiscal year by breaking its previous record of $ 4.6 billion in FY06. The target of tax collection also achieved during the last fiscal year and overall collection crossed the target of Rs 835 billion.

The services sector also performed well but its growth was less than FY06. In last fiscal year, it achieved 8 percent growth against 9.6 percent in FY06. The agriculture loan target also was achieved in the last fiscal year, as the commercial and specialised banks surpassed the target of credit disbursement to the agriculture sector in FY07. The total disbursements reached Rs 168.3 billion representing 22.4 percent growth over the preceding year disbursement of Rs 137.5 billion and exceeding the actual target of Rs160 billion.

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