Pakistan Economy - News & Updates - Archive

[Neo]

Seafood export ban likely to stay ​

KARACHI: Seafood exports to the European Union are likely to continue suffering for an indefinite period as the federal authorities have refused to give a green signal to the seafood processing factories on grounds that they have not yet removed deficiencies.

A senior official rejected claims made by the seafood exporters last week that 11 seafood processing factories had invested more than Rs50 million to remove deficiencies cited in the final report of the EU’s Food and Veterinary Office (FVO) and said only concrete initiatives on the part of processing factories could lift the ban.

“We are not satisfied as yet. Out of the 11 seafood processing factories, most have not come up with the desired measures,” said Dr Hayat Muhammad Khan, Federal Fisheries Commissioner. “We even visited two factories on Wednesday but didn’t find them up to the mark. The MFD (Marine Fisheries Department) inspection team is authorised to give quality certification and has marked most of the seafood companies ‘below quality standards’.”

Hayat said the federal government had also engaged experts from the United Nations Industrial Development Organisation (UNIDO), who had expressed dissatisfaction over conditions at the seafood processing factories, which had further given credence to the authority’s stance.

“We are not concerned about the fishing season,” said the fisheries commissioner. “What we are concerned about is improving quality standards. The seafood companies should remove deficiencies to resume exports to European countries.” The fisheries commissioner’s comments came at a time when more than 100,000 fishermen braced themselves for the fishing season which resumed in August after a two-month gap due to the fish breeding season.

If the ban continues, exporters fear fishermen along with the industry would be the losers, as they would not be able to sell their sea catch at better prices to the processing factories.

The government in March 2007 received an initial finding from the EU, which informed Pakistani authorities about deficiencies in the production chain, which led to delisting of all seafood processing factories on quality control grounds, putting a ban on the country’s $80 million exports.

However, in the final report released recently, the EU has marked the grey areas where MFD failed to ensure implementation on previous quality control recommendations, which led to the suspension of seafood exports to the 27-nation European bloc in the first place early this year.

More than four months have elapsed and still fundamental quality standard concerns remain to be resolved.

“The factories have been standardised as per EU requirements and the authorities’ reservations are baseless,” said Akhlaq Hussain of Akhlaq Enterprises, one of the largest Pakistani shrimp exporter to the EU.

“Even my factory was inspected a couple of days back by government authorities and the team showed their satisfaction, finding everything upto mark. Then how comes such change in the authority’s stance in a flash?”

He said UNIDO was not mandated to check quality standards at the factories and the fisheries department was hiding its own deficiencies and short comings in the guise of objections from the FVO.

Figures compiled by the State Bank suggested seafood export earnings at $160 million by June 2006 up from $138.94 million earnings during 2004-05, as EU countries remained the largest importers of Pakistani seafood products.

The EU imports more than 60 per cent of its total seafood from Pakistan; the 27-nation block has been the largest single buyer of Pakistani seafood for more than two decades.

http://www.thenews.com.pk/daily_detail.asp?id=66721

 

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Drive to check unauthorised sale of SIM ​

KARACHI: The Pakistan Telecommunication Authority (PTA) has started checking unauthorised sale of new subscriber identity module (SIM) from August 1 across the country to ensure that new mobile connections are issued after proper documentation.

“Various teams of PTA Zonal offices at Lahore, Karachi, Quetta, Peshawar and Multan would carry out surprise checks and inspections in their respective areas,” said a statement on Thursday.

“The PTA would start sealing those franchises which were not complying with PTA regulations on issuance of new cell phone SIM and concerned company will be asked to cancel its franchise. After these inspections, companies will also be asked to take remedial measures and ensure implementation of PTA directives in this regard.”

It said the PTA had taken a number of steps to deal with this issue and has directed cellular mobile companies to ensure that new SIM were sold only through its franchises or authorized dealers.

“Similarly, mobile companies are running ads in the press wherein they have advised their users to get their connections transferred in their names if they have not as yet done so. Companies are also sending short messages to subscribers in this regard,” added the statement.

It said the PTA had directed the mobile companies to get their data streamlined at their end by August 31, 2007. The companies would provide complete data of their subscriber’s to NADRA for verification purposes, added the statement.

http://www.thenews.com.pk/daily_detail.asp?id=66723

 

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‘High monetary growth causing inflation’ ​

KARACHI: The fiscal year 2007 witnessed a monetary growth of 19.3 per cent against the target of 13.46 per cent, which would lead to inflation, said Masood Naqi, Chairman Korangi Association of Trade and Industry.

That high growth was the actual cause of monetary inflation in the country, but the State Bank blamed food prices as the real cause of higher inflation, said Naqi. “New target is 13.7 per cent, which is optimistic if achieved by SBP.”

Export finance was not properly utilised and export industries were facing tough competition and would not be able to meet the new challenges. “Exporters not meeting targets should not be penalised and given another chance,” he added.

He said it had been a common concern for the business community that further tightening of monetary policy could prove counter-productive.

To curtail the monetary growth, interest rates had been increased that would raise the cost of borrowing. The high cost of borrowing was inflationary in nature and might keep inflation higher, contrary to the efforts of the State Bank, he added.

On the other side, he said, higher lending rates could lead to low supply of credit to the private sector and it could result in low economic growth, particularly the manufacturing sector could face a difficult situation.

http://www.thenews.com.pk/daily_detail.asp?id=66727

 

[Neo]

Greater role for State Bank, SECP sought​

ISLAMABAD, Aug 2: The newly-approved “Industrial Vision” urges the government to restructure and strengthen non-banking finance companies to make them an integral part of financial services industries.

The Vision made available to Dawn also calls for further enhancing the institutional capacity of the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan (SECP) in becoming “effective regulators and supervisors of the financial system.”

It further urges the government to automate the existing manual systems (banking operations) and to develop local and wide area networks, connecting various departments and offices across the country.

“Pakistan must continue the reforms process, with particular emphasis on ensuring autonomy and competence of regulators and promoting professional management at all levels of decision-making in the financial institutions.”

It also asked the government to implement the privatisation process efficiently and prudently so that 90 per cent of the banking assets are in the private hands.

A well-functioning financial system that efficiently channels funds, that can be invested to most productive uses, is essential for industrial development and growth.

Recognising the importance of financial reforms in the process of industrial development and economic growth, a series of measures have been adopted in recent years with a view to removing various distortions in the financial system, minimising government's interference in the banking system and strengthening the prudential regulations.

The government was also urged to achieve a sustained growth rate of five to six per cent in agriculture which is imperative to ensure a rapid growth in national income, macroeconomic stability, improvement in distributive justice and a reduction in poverty.

“This can be realised by exploiting the achieved potential of all the sub-sectors of agriculture, diversifying agricultural production towards high value crops, and conserving land and water resources.

A higher level of investment in agricultural research and development (R&D) activities supported by favourable policy instruments, human resource development, and necessary physical and institutional infrastructure could prove a catalyst towards achieving enhanced productivity and the desired growth rate.

It also believed that the goals of the industrial vision cannot be realised without an effective energy sector. The supply-demand analysis shows that even modest economic growth, the current rate of change in supply will result in power shortages in Pakistan, adversely affecting the growth process.

Therefore, Pakistan needs to concentrate not only on the expansion of energy resources but also on improving efficiency of resource use.

For expansion of power supply it is important to increase the supply of power from traditional resources, like hydel, thermal and nuclear and from other sources, like building micro-mini hydel power units.

For safe and efficient transportation network, a number of measures were also proposed which included modernisation of the maintenance system, introduction of user charges, human resource development through training in transport management and maintenance standards and enhanced participation of the private sector in transport projects.

It recommended revival of Karachi circular railway, and introduction of light rail transit system in Lahore as part of measures to improve urban transportation.

Major issues in the transport sector are: inadequate physical capacity; inadequate maintenance system; poorly targeted investment priorities; operational and financial inefficiencies of the public investment; and lack of private sector participation.The rational allocation of inland freight traffic between rail and road network, privatisation of railway's operation in selected sections and inclusion of private sector in development of roads, airlines, ports and shipping, and inland navigation can help improve efficiency of the sector.

The Vision also carries out an in-depth analysis of major sub-sectors of all the three productive sectors of economy: agriculture, industry, and services and within each sub-sector identifies key issues and challenges, sets out strategic objectives and targets, and spells out a detailed plan to realise the vision.

Information technology (IT), it said, has assumed greater importance in the knowledge-based economy. The government has accorded high priority to the IT sector.

The main initiatives include the addition of facilities for computer education and training at affordable rates while ensuring quality of education, enhancement of internet infrastructure and provision of efficient internet services at reasonable rates, establishment of software technology parks and data networks, incentives for software exports and computer hardware manufacturing, enhance arrangements for marketing of software overseas, and the provision of a legal cover to electronic transactions enabling implementation of e-commerce.

The software industry in Pakistan has enormous potential to grow from its current size.

The worldwide IT services market is growing at the rate of eight per cent in real terms and expected to reach about $910 billion by 2010. Of this, about 54 per cent will consist of hardware maintenance, IT management and other services.

Strategies have been proposed under several focused areas, including IT education, e-governance, and targeted IT human resource development.

The Vision also believed that the role of construction and housing sector in economic growth of a country is quite significant.

In Pakistan, there is a huge gap in the supply and demand for housing: currently there is a shortage of 5.5 million units.

The Vision discusses the role of science and technology and research and development in quantitative and qualitative improvements in the construction and housing sector.

The recommendations include acquisition of technology for improving the quality of building material, opening of a department of architecture at the higher level of education, establishment of a centre for standardisation of construction material, research and development on improvement and commercialisation of high quality construction material, and provision of other facilities and infrastructure.

For increased availability of affordable housing for the poor, development of construction material, like ferro-cement for low-cost and mass housing is recommended. This is a low-cost technology, and commercial production of the material can be useful for achieving the objective of housing for all.

http://www.dawn.com/2007/08/03/ebr2.htm

 

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Wapda plans $1 billionIslamic bond​

KARACHI, Aug 2: The Water and Power Development Authority is considering issuance of an international Islamic bond or Sukuk, worth up to $1 billion, a senior official said on Thursday.

“We have asked all leading local and international banks to submit their proposals for the planned issue by Aug 31,” said Hamad Rasool Bhullar, director finance at Wapda bonds cell.

“We are looking at a size of $500 million to $1 billion, and we plan to do it as early as possible... hopefully in the next six months or so,” Bhullar told Reuters by telephone from Lahore, where the utility is headquartered.

Wapda last week signed an agreement with Dubai Islamic Bank, National Bank of Pakistan and Standard Chartered Bank (Pakistan) Ltd. for the issuance of a 10-year, 8-billion-rupee domestic Sukuk.

Bhullar did not give names of the banks that have been asked to submit their proposals, but bankers said they include ABN Amro Citigroup, Deutsche Bank and Merrill Lynch.

The tenor of the planned Sukuk is also yet to be decided.

In 2005, the government of Pakistan floated a $600m Islamic bond for a five-year term, no other Pakistani entity has issued a dollar-denominated Islamic bond on international markets.

http://www.dawn.com/2007/08/03/ebr10.htm

 

[Neo]

Traders asked to invest in S. Africa​

ISLAMABAD, Aug 2: Pakistan can increase export of traditional products, like surgical equipment, rice, sports goods to South Africa. Speaking to traders at the Islamabad Chamber of Commerce and Industry (ICCI) here on Thursday, the Acting High Commissioner of South Africa to Pakistan Cassim Peer said South Africa was the main shopping centre of seven neighboring countries.

He said even textile products export to South Africa can increase because of greater demand in South African market.

The envoy said South Africa has great potential for export of gold, diamonds, platinum, other metals and minerals, machinery and raw material of steel products.

He suggested to create a linkage between South African chambers and the ICCI for exchange of trade-related information for stronger business ties.

He added that the current level of bilateral trade was insufficient which needs to be enhanced.

He said that several trade delegation form South Africa would attend exhibitions in Pakistan for enhancement of bilateral trade.

He said the Chinese and Indian companies are capturing South African market and stressed that Pakistani investors should also invest in South Africa.

He informed that there are ample opportunities of investment in information technology, mining, agriculture and other sectors.

ICCI President Nasir Khan said bilateral trade could be increased through exchange of delegations. He said that ICCI will take a delegation to South Africa.

http://www.dawn.com/2007/08/03/ebr16.htm

 

[Neo]

Over Rs3bn tax frauds detected​

ISLAMABAD, Aug 2: Tax frauds of more than Rs3 billion committed in financial years 2005 and 2006 have been detected, Minister of State for Finance Omar Ayub Khan informed the National Assembly on Thursday.

This evasion was reported in 76 companies which either evaded the payment of due taxes on their transactions or committed frauds in the shape of getting undue refund or rebate from the tax department.

In a written reply to a question submitted by PPP MNA Mrs Belum Hasnain, the state minister informed the lower house that in some cases action had already been taken against those tax officials who were found guilty.

He said that FIRs had been lodged against the companies involved. He said it had been observed that majority of tax frauds had been committed by the companies dealing in exports, particularly in textile-related products.

The minister quoted some major cases, including those involving M/s Dancom Pakistan which had allegedly committed a tax fraud of Rs140 million, M/s Early Morning Textile (Rs104m), M/s Bilal Traders (Rs203m), Atlas Honda (Rs118m), M/s Fateh Textile (Rs110m), M/s Pak Arab Fertilisers (Rs116m) and M/s Fateh Yarn (Rs76m).

In the rest of cases the amount of tax evasion was less than Rs50 million but more than Rs5 million during the years under review, the minister added.

He also informed the National Assemble that to check leakages in the tax revenue a number of measures had been taken. He said every prescribed person — withholding agent — was legally bound to furnish statement showing complete particulars of the payee, the nature of transaction, amount paid, tax deducted and deposited thereon.

He said to identify leakages in sales tax and federal excise duty, scrutiny of sales tax returns submitted by the registered persons, the detailed audit was conducted by the field formation and directorate of audit department.

The minister said that Rs8.725 million penalties had been imposed on 1,209 income tax defaulters out of total 13,149.

He said that actions were taken in cases of tax evasion/fraud, which included contravention proceedings; prosecution proceedings in cases of tax frauds and departmental proceedings against the negligent or conniving officials.

He further said to minimise the leakage of revenue a number of measures had been taken which included verification of tax payments, input tax adjustments, minimising interaction between the taxpayers and tax collectors, streamlining and simplification of laws and procedures and specialised audit techniques and focused audits based on a national audits strategy.

http://www.dawn.com/2007/08/03/top4.htm

 

[Neo]

Trade with India​

FEARS that the current imbalance may tilt further to Islamabad’s disadvantage should not dampen efforts to usher in a new era of bilateral trade between Pakistan and India. The ongoing talks between the two commerce secretaries have raised hopes that the volume of trade between the two countries could increase almost six-fold in three years — from 1.62 to ten billion dollars. Moves are also afoot to open branches of at least two Pakistani and Indian banks on either side of the border — a development that would greatly facilitate the regional business community. Already, trade between the two neighbours has doubled in the last two years, with Indian exports to Pakistan accounting for over 77 per cent of the total volume. Pakistan’s exports to India stood at $370 million in 2006-07 compared to $1.25 billion worth of goods flowing in the opposite direction — a state of affairs described as “disconcerting” by the Pakistan commerce secretary.

That said, Pakistan stands to gain from freer and more robust trade with India. Industrial inputs account for between 35 and 40 per cent of Pakistan’s total imports, and it makes economic sense to do business with the cheapest supplier. India has both experience and expertise in the production of heavy machinery and chemicals, and such imports from across the border would be less costly than those from Europe, Australia or North America. This, in turn, would reduce the cost of production in Pakistan, potentially making exports more competitive. Even if exports do not receive a boost, local consumers reeling under inflationary pressures could benefit from less expensive goods. Pharmaceuticals is another area where imports from India can bring relief to the poor and the middle classes. Basic medicines are significantly more expensive in Pakistan than in India, and the availability of cheaper alternatives may help jolt the local industry out of its rapacious ways. Pakistan also has products to sell, such as cement, and the gradual erosion of India’s non-tariff barriers — if and when that happens — could pave the way for other industries as well. Bringing ‘informal trade’ within the official ambit will also benefit the exchequers of both countries.

http://www.dawn.com/2007/08/03/ed.htm#2

 

[Neo]

Bumper mango crop may lead to 40% enhanced export ​

KARACHI: Owing to bumper mango crop during the current season, its export target is likely to go up by more than 40 percent as compared to last year as the country has already surpassed last year’s target two months ahead of closure of the export season.

Out of 125,000 tonnes of mango export target for the current year, the country has already accomplished 88,000 tonnes goal as compared with previous years 85,000 tonnes, while the export process will continue until the month of October, two months from now.

This was stated by Chairman Fruit Exporters Association of Pakistan, Abdul Wahid while talking to Daily Times about the substantial growth achieved by the country in the mango export.

He termed the improved ratio of mango export due to its bumper crop during the current year achieved owing to better planning and adoption of modern farming methods.

Major exporting countries include almost all Gulf countries like Saudi Arabia, Oman, Kuwait, UAE, European countries including Sweden, Denmark, UK France and some parts of far eastern countries, including Singapore and Malysia. Dubai remained the top market for Pakistani mangoes by importing so far 35,000 tonnes followed by Europe, including the United Kingdom with 10,000 tonnes.

Pakistan exported 12,000 tonnes mangoes to Saudi Arabia, while 9,000 tonnes were shipped to other Gulf countries like Oman and Kuwait.

Export of mangoes to the far eastern countries including Singapore and Malaysia stand at more than 15,000 tonnes.

Replying to a question, he said compared to 11 ½ tonnes of mango exported previous year through air route, target for the current year is more than 15,000 tonnes out of which 10 ½ tonnes has already been achieved while rest is expected in next two months. Currently two most popular varieties of Chaunsa, Kala Chaunsa and White Chaunsa, besides Began Pheli and Sunehra, are exported in bulk through air and sea routes fetching substantial foreign revenue to the national exchequer.

http://www.dailytimes.com.pk/default.asp?page=2007\08\04\story_4-8-2007_pg5_4

 

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GDP growth target for 2007-08: Government stresses value-addition​

ISLAMABAD: To achieve the GDP growth target of 7.2 percent for the year 2007-08, the government would give more emphasis on high value-addition in agriculture sector including livestock, fisheries, and manufacturing sector particularly in engineering goods and services.

According to the annual plan for the year 2007-08, issued by the Planning Commission, the future economic targets will be achieved easily when taking into account the strong economic realisations during the last four years. Keeping in view the existing agriculture sector performance particularly in major and minor crops, the agriculture sector is targeted to grow by 4.8 percent in the current fiscal year.

For the agriculture sector, the annual plan reveals that better water availability, water management, best pest control practices and application of modern techniques of production and more credit facilities to farmers will help in achieving the agricultural targets. The government will provide better environment and infrastructure facilities to agriculture producers.

For the year 2007-08, the value-addition in major crops is projected to increase by 4.5 percent to Rs 415.1 billion compared to Rs 397.2 billion in the previous year. In major crops, the production of sugarcane is projected at 55.9 million tonnes for the year 2007-08 compared with 54.7 million tonnes achieved during 2006-07; cotton production is projected to increase by 8.8 percent to 14.14 million bales.

The annual plan also projects maize production at 3.2 million tonnes and that of rice at 5.7 million tonnes. For wheat production, the target has been set at 24 million tonnes higher by two percent against last year. The production of minor crops for the year 2007-08 is projected to increase by 2.3 percent to Rs 130.8 billion against Rs 127.9 billion in the last year. The livestock sector is projected to increase by 5.7 percent against 4.3 percent during the last year. Fishery and forestry sector is targeted to grow by 4.2 percent and 3.5 percent respectively for the year 2007-08.

The mining and quarrying sector is projected to grow by 4.5 percent based on a 15 percent increase in extraction of natural gas, 10 percent in crude oil production and 15 percent increase in coal production. Limestone and rock salt are expected to increase by 8.5 percent and 10 percent respectively.

The manufacturing sector is targeted to grow by 10.9 percent. Prominent growing industries would be cement, cotton yarn, paints and varnish, LCVs and cars, air conditioners, motor tyres and tractors. The services sector is envisaged to be the main contributor towards the robust economic growth for the year 2007-08 and is projected to grow by 7.1 percent. The main contributors of value addition in this sector are transport, storage and communication (5.9 percent), wholesale and retail trade (7.8 percent), finance and insurance (15 percent), ownership of dwellings (4 percent), public administration and defence (4 percent) and social, community and personal services by 5 percent.

Savings and investment are targeted to increase by 7.2 percent; total investment is projected to increase by 18.9 percent to Rs 2381.6 billion from the level of Rs 2003.6 billion in the last fiscal year. National saving as a ratio to GDP is projected at 18.8 percent to reach a level of Rs 1882.8 billion. To achieve the annual plan targets, the government is emphasising on macroeconomic stability so as to keep a balance among internal and external accounts. It is also planned that investment targets will be achieved by using national savings and foreign savings in the ratio of 79 percent and 21 percent, respectively.

http://www.dailytimes.com.pk/default.asp?page=2007\08\03\story_3-8-2007_pg5_1

 

[Neo]

Textile Industry Development Policy 2007 : Tax incentives to attract FDI in textile sector ​

ISLAMABAD: The proposed Textile Industry Development Policy 2007 is expected to offer four tax incentives to attract foreign direct investment (FDI) in upcoming textile and garment cities, a senior official at the Ministry of Textile Industry (MINTEX) told Daily Times on Wednesday.

Among its proposals to the tax authorities, MINTEX proposed that all import of textile machinery and raw material should be duty-free to facilitate import of the latest textile machinery, which would prove to be a big incentive for the textile sector to enhance its production capacity. At present, tax authorities are charging a minimum of five percent custom duty on the import of machinery.

MINTEX has also proposed tax-free procurement of machinery and raw material from the domestic market so that the production capacity is expanded. The proposed incentives include a general sales tax exemption on utilities to those investing in upcoming textile and garment cities.

The government has already allowed general sales tax at zero rating on electricity and gas consumed in the production process of the textile sector. At present, it is establishing garment and textile cities in Karachi, Lahore and Faisalabad to ensure enhanced value-addition and export surplus in the country.

Exports of textile products amounted to $10.757 billion in 2006-07 increasing by 5.27 percent from $10.218 billion in the previous year.

The government has fixed a growth target of 12 percent for textile exports for the current fiscal year 2007-08.

http://www.dailytimes.com.pk/default.asp?page=2007\08\03\story_3-8-2007_pg5_3

 

[Neo]

FBR declares FY 2007-08 as tax recovery year​

ISLAMABAD: The Federal Board of Revenue (FBR) has declared fiscal year 2007-08 as a year of recovery of tax arrears and decided to recover tax arrears as land revenue arrears through land revenue authorities of the four provincial governments, a senior tax official told Daily Times on Thursday.

Tax revenue to the tune of billions of rupees is stuck due to the half-hearted efforts of the tax authorities and non-availability of taxpayers at their declared addresses and willful default of the taxpayers. Decision to this affect was taken during the first quarterly conference of the director generals, regional commissioners and commissioners of income tax held recently in the chairmanship of the Muhammad Abdullah Yusuf.

It was decided in the conference that four determined priority areas for their revenue generation efforts include recovery of arrears, monitoring of withholding taxes, broadening of tax base and audit. In the areas of tax arrears recovery, the conference was informed that this has been declared as a year of recovery of arrears. The chairman emphasised that 25 percent arrears should be liquidated quarterly. It was further decided that arrears in every case would be forwarded to the revenue authorities for recovery as of land revenue.

For this purpose close coordination would be ensured with land revenue authorities by the concerned authorities.

The meeting was informed about the strategy to be adopted by the income tax authorities for increase in the tax base. It was informed that liaison with Securities and Exchange Commission of Pakistan would be ensured to detect corporate sector non-filers of income tax return. Date base of the different activities like sale purchase of transactions of immoveable property, sale purchase of motor vehicles, telephone subscribers, utilisation of withholding taxes as means of documentation and conducting sectoral studies. sajid chaudhry

http://www.dailytimes.com.pk/default.asp?page=2007\08\03\story_3-8-2007_pg5_5

 

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Morocco invites Pakistan to export textiles under FTA ​

KARACHI: Pakistani entrepreneurs should take advantage of Morocco’s Free Trade Agreement (FTA) with USA and European Union (EU), particularly in the textile and readymade garments, Morocco Ambassador Mohammed Rida El Fassi said here on Thursday.

In a meeting with Vice-President Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Zubair Tufail, the ambassador said that under the FTA, Morocco has free access of readymade garments to USA, which is a huge market for garments.

In addition, Morocco is geographically closer to Europe, giving it an advantage of easy access and reduced freight charges.

“Morocco is a big exporter of readymade garments to Europe, and that Pakistan companies can share the Moroccan export to Europe,” ambassador said.

The ambassador went on to invite Pakistani companies to set up garment units in Morocco, where even a 30% value addition is acceptable to the European Union.

Consul General of Morocco in Pakistan Mr. Ishtiaq Baig Honorary also gave a briefing on the Morocco market.

Earlier, Vice-President FPCCI welcomed the Ambassador and said that economic relations between Pakistan and Morocco do not reflect their otherwise cordial relations.

He informed that Pakistan’s export to Morocco stands at $11.5 million, whereas import from Morocco was $147 million.

The Vice-President stressed that the private sector of both the countries should come closer to open new possibilities for bilateral trade, and added that the FPCCI would work towards a Pakistan Single Country Exhibition and will send a trade delegation to Morocco.

http://www.dailytimes.com.pk/default.asp?page=2007\08\03\story_3-8-2007_pg5_7

 

[Neo]

Coal exploration in Sindh to start this month​

LONDON: Exploration for coal for use in the production of electricity is set to begin later this month in Sindh by a UK-based Pakistani company.

Oracle Coalfields plc has raised funds through private and institutional investors, which will be used to develop the 100 square kilometres Indus East coalfield at KhoreWah in Sindh.

According to a company official, a 12-month exploration programme has been mapped out to develop the coalfield for fuelling the power sector.

Company Director Shahrukh Khan said his organisation will develop the Indus East coalfield with local partners Sindh Koela Limited. He said Pakistan has substantial indigenous coal resources, which are estimated at around 185 billion tonnes. “Our aim is to become a mining operation, and provide employment and electricity to the country through the construction of an aggregate 150Mw coal-fired power plant, in conjunction with Sindh Koela.”

Khan said electricity consumption in Pakistan has been growing faster than new sources and this has resulted in load shedding. Noting that Pakistan’s economy is forecast to grow at between 6-8 percent per annum over the next two decades and the projected peak demand for grid electricity is expected to increase to 75,636Mw by the year 2025, he said new sources of electricity are imperative for the country.

He further said currently coal represent only 1 percent of fuel supply to the electricity sector and is projected to increase to about 17 per cent by 2025.

http://www.dailytimes.com.pk/default.asp?page=2007\08\03\story_3-8-2007_pg5_9

 

[Neo]

Good news on Indo-Pak trade front​

The news that India and Pakistan have decided in New Delhi to increase their bilateral trade by six times to $10 billion by 2010 should not go unnoticed because it means the pulling down of some of the political barriers that have stymied economic development in both countries. Like all trade negotiations, the two sides should seek mutual advantage and learn to adjust their economies accordingly, all the while keeping focus on what they have agreed under their World Trade Organisation (WTO) commitments.

It is the political barrier in Pakistan that has to be pulled down; and India’s economy has to get rid of the hangover from its Nehruvian days and match the openness it demands from its free-trade neighbours. All said and done, though, getting bilateral trade to touch $10 billion by 2010 will stretch the imagination of both parties which are used to deadlocking each other as a good domestic gimmick. Trade now stands at $1.7 billion and is heavily in India’s favour, which clearly indicates where the logjam has to be broken. Many more items will have to be included in the list of tradable commodities, which today stands at 1,800, having grown painfully slowly from only 40 under the regime of General Zia-ul-Haq in the 1980s.

Economic wisdom is not a plant that grows wild in South Asia. The Indo-Pak economic thaw has been forced by external leverage as Pakistan has got used once again to American assistance and India has quenched its thirst for nuclear technology from the United States. Pakistan has been linking a “breakthrough” in trade with India to “progress” in peace talks with special reference to the Kashmir dispute. The idea in Islamabad is to “punish” (sic!) India in order to get its way on Kashmir. It says it has great “geopolitical” advantage because it sits astride a clutch of trade routes joining South Asia with Central Asia. But the operationalisation of this vision is “obstructive” rather than “constructive”. The purpose is to deprive someone else of advantage, not to seek advantage for oneself.

The one item in President General Pervez Musharraf’s political agenda that has found favour among the masses in Pakistan is normalisation with India. While not detracting from his efforts to ease the tensions that peaked in 2001, one has to fault his men for not grasping the urgency to get Pakistan’s equation straightened out with India as the status quo power in the region. India had granted Pakistan the most favoured nation (MFN) status in 1996 but Pakistan has not reciprocated “because of Kashmir”, a decision accepted by Pakistan’s ruling politicians “because of internal pressures”.

What militates against this policy is the multilateral treaty of a free trade area (SAFTA) signed by it at South Asian Association for Regional Cooperation (SAARC). The treaty required the signing of bilateral free trade treaties among SAARC members. Pakistan signed the free trade treaty with India but refused to ratify it “because of Kashmir”. That leaves Pakistan isolated in the region where all other states have signed and ratified their free-trade treaties with India.

There are reasons for holding Pakistan more responsible than India for the delay in economic normalisation. It is not useful for Pakistan to view its geopolitical advantage in military terms. And if it takes another look at itself as a trading nation rather a warrior state, then it has to actively sell its trade routes to the two regions it has actually tried to separate for the past 60 years. Its efforts to extract a price for being the impenetrable barrier to movement of commodities have given a strangely anachronistic definition to the Indo-Pak border. There are few frontiers left in the world today that are as off-limits as this boundary line. The examples that spring to mind — North and South Korea, Israel and some of its neighbours (Syria and Lebanon) — explain how threatening the policy is to the region.

The two economies are communicating all right, but through third countries and through smuggling. Analysts rightly add a couple of billion dollars to this regular trade by computing a huge chunk that Pakistani importers consume on the side. But now that the two sides have pledged to facilitate Pakistan’s exports to India — cement is on the line — things may start looking different. It is only after agreeing to do normal trade that one can get into the nitty-gritty of getting the other partner to pull down its non-tariff barriers. There are no trading partners in the world who don’t occasionally lock horns, at times quite aggressively, over trade imbalances.

Pakistan is threatened on its western border in a most glaring contradiction of its traditional security perception in the region. But it is taking too long — even after loss of territory — to even recognise this threat. Normalisation with India is on the cards, the people of Pakistan want it, the changing threat perceptions demand it, and one can, and should, choose to do the right thing without being dragged to it kicking and screaming. *

http://www.dailytimes.com.pk/default.asp?page=2007\08\03\story_3-8-2007_pg3_1