Pakistan Economy - News & Updates - Archive

[Neo]

Use of hydro, thermal sources urged to meet power needs ​

LAHORE (August 04 2007): Punjab Power Minister Chaudhry Armaghan Subhani has said the Punjab Power Development Board should use both hydro and thermal power sources to meet power demands in the province. He made the comments while chairing a meeting to review the progress of the Punjab Power Development Board here on Friday.

He also said PPDB should process and ensure implementation of power generation projects in liaison with the Private Power and Infrastructure Board, Power Distribution Companies and National Transmission and Dispatch Company to achieve its objectives. "PPDB should also liaise with other power generation agencies to ensure the inter-transfer of information and data related to load growth and of the respective plans to meet it." He said.

According to the latest load forecast, the expected projected load growth by 2025 will be 36,358 mw, which is about 330 percent of the loads in the year 2002-03 while the load forecast up to year 2010 of Punjab province is about 11,500 mw. The load growth requires a proper expanded generation plan to be managed. He said. "Punjab has sufficient resources to generate about 480 mw from 315 hydel locations. This potential is in addition to other options available for thermal generation based on indigenous fuel such as oil, coal and gas."

The meeting informed the minister that out of the total generation capacity of 17,975 mw in the country, the Water and Power Development Authority and General Companies owned 9,750 mw, the Karachi Electric Supply Corporation owned 1,756 mw and rest is owned by independent power producers.

http://www.brecorder.com/index.php?id=600574&currPageNo=1&query=&search=&term=&supDate=

 

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Uganda to buy agricultural machinery from Pakistan ​

ISLAMABAD (August 04 2007): Uganda expressed the desire to purchase latest agricultural equipment's and livestock processing units from Pakistan to boost its agriculture sector. A-3 member high level Ugandan delegation led by its Minister of State for Animal Industry, Rawamirama K. Bright met Federal Minister for Food, Agriculture and Livestock, Sikandar Hayat Khan Bosan on Friday.

They discussed matters relating to promotion of agriculture and trade between both of the countries. They informed the Minister about his visit to Agriculture related equipment industries in Daska, Lahore and Faisalabad.

Bosan told the Ugandan Minister that the Government was focusing on developing the Agriculture sector for eradication of poverty from the country. He ensured the delegation that Pakistan would extend all possible help to Uganda for the purchase of agriculture and meat processing machinery from Pakistan to promote the agriculture sector in Uganda. Later the delegation visited National Agriculture Research Centre (NARC).

The meeting was also attended by Zia ul Rehman, Secretary (MINFAL), M. A. Tasnaeem, Chairman PARC, Muhammad Saleem Jhagra, Additional Secretary MINFAL and other senior officials of the Ministry.

http://www.brecorder.com/index.php?id=600512&currPageNo=1&query=&search=&term=&supDate=

 

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Kachhi canal project to be completed by December 2008 ​

LAHORE (August 04 2007): The phase-I of Kachhi Canal Project comprising 400-km long main canal and head regulator will be completed by December 2008. Chairman Wapda Tariq Hamid said the completion of phase-I would facilitate irrigating 1,02,000 acres of land in District Dera Bugti of Balochistan.

While speaking at a Rs 3.274 billion contract signing ceremony for the construction of the head regulator of Kachhi canal, held here at Wapda House today, Tariq said Kachhi Canal project is of immense importance, particularly for the province of Balochistan. This project will enable the province to draw its allocated share of water as per water apportionment accord 1991.

General Manager (Central) Water, Waseem Ahmed and Ateeq Zaman Khan signed the agreement on behalf of Wapda and Descon respectively. The agreement includes construction of Kachhi Canal head regulator and other structures at Taunsa Barrage along with canal section by December 2008.

The chairman said the overall completion of the project is expected by the year 2010 with an estimated cost of Rs 31.2 billion. Kachhi canal is one of the priority projects being executed by Wapda under 'Vision 2025' programme and aims at irrigating about 7,13,000 acres of land in Kachhi Plain of Balochistan, he concluded. Member (Water) Wapda, Muhammad Mushtaq Chaudhry was also present on the occasion.

http://www.brecorder.com/index.php?id=600554&currPageNo=1&query=&search=&term=&supDate=

 

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Pakistan keen to enhance ties with Asean ​

ISLAMABAD (August 04 2007): Pakistan is keen to further develop political, security and economic relationship with Association of Southeast Asian Nations (Asean) in line with its vision East Asia Policy. State Minister for Foreign Affairs Makhdum Khusro Bakhtyar stated this at the ministerial meeting of fourteenth Asean Regional Forum (ARF) held in Manila, says a Foreign Office press release issued here.

ADDRESSING THE FORUM, THE MINISTER OF STATE UNDERLINED:

Pakistan's perspective on major regional and international security challenges. He spoke about the significance of composite dialogue process with India for resolving all outstanding issues including the occupied Kashmir dispute. Bakhtyar also underscored Pakistan's contribution towards international campaign against terrorism and extremism. He urged the need to adopt a holistic approach to deal with the scourge through inter-civilisation dialogue and understanding among followers of different faiths.

The Minister of State stated that Pakistan was making its utmost contribution towards achieving peace and security in Afghanistan. He said Pakistan was committed to support all efforts aimed at resolving the issues faced by the Middle East including Palestine, Iraq and Lebanon.

On the sidelines of the meeting, the Minister of State held meetings with the Foreign Ministers of China, Sri Lanka, Republic of Korea, Lao PDR and the Philippines and the Deputy Foreign Minister of Canada. During the meetings, issues of mutual interests and Pakistan's bilateral relations with respective countries were discussed.

http://www.brecorder.com/index.php?id=600520&currPageNo=1&query=&search=&term=&supDate=

 

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Runaway deficits threaten economy ​

ISLAMABAD: Pakistan economy’s runaway twin deficits, if unchecked, could cause irreparable damage to the macroeconomic stability of the country and are likely to pose a serious threat to the smooth functioning of financial markets, valuation of rupee, monetary policy and economic growth in particular.

The State Bank of Pakistan (SBP) in its monetary policy statement for July-December 2007 has covertly blamed fiscal extravaganza for monetary indiscipline in the economy during 2006-07.

During fiscal year 2006-07, fuelled by a huge $13.53 billion trade gap, the country’s current account deficit (CAD) widened to a staggering $7.016 billion (4.9 percent of GDP) from $4.99 billion or 4.3 per cent of GDP in FY 2005-06.

Likewise, the widening revenue-expenditure gap due to expansionary fiscal policy also stood at about Rs366.13 billion ($6 billion) against Rs325.18 billion recorded in FY 2005-06.

This was the reason that the government’s borrowing from the banking system ie scheduled banks and the central bank, was on the rise for budgetary support. The SBP, however, is committed to putting a check on monetisation of the fiscal deficit.

Pakistan’s current account and budget deficits are reflecting a greater degree of deficit tolerance on the part of the government. The government has added Rs260 billion to the domestic debt stock and $1.6 billion to the external debt stock by end-March 2007, which is amazing for a government claiming to be breaking the begging bowl.

The twin deficits collectively put a question mark over the tall claims of fiscal prudence and external sector comforts. The government’s economic planners keep on saying that Pakistan is enjoying an economic boom and the current account was manageable because at the moment greater chunks of it are being financed through non-debt creating inflows like remittances and foreign investment. However, a hefty increase of $1.6 billion to the external debt stock in nine months is self-explanatory of prudent debt management.

One dismaying aspect is that the government could have easily controlled this over-spending, but none bothered about it. For instance, issuance of Eurobond and GDR at high interest rates in the range of 7 to 10 per cent has only added to the low-yielding (0.5-1.5 per cent) reserves.

To the government, all inflows like remittances, FDI, portfolio investment, foreign economic assistance and foreign exchange reserves are very encouraging. But the million-dollar question is for how long can the current account deficit of this magnitude be financed through these inflows? And how long can Pakistan continue to spend more than its earnings for the sake of higher growth when the sustainability of these inflows is questionable?

The inflow of foreign investment should be taken with caution because most of the inflows are in sectors like financial business, telecoms and food and beverages where returns are high and have implications for remittance of profits and dividends which have already witnessed a tremendous rise in 2006-07. It is likely to have serious implications for the balance of payments.

On the other hand, it is very pleasing for Pakistan to receive large foreign direct investment (FDI), but the painful aspect of this growth is rising outflows of profits/dividends in foreign exchange.

During FY 2006-07, such outflows on account of remittance of profits and dividends to foreign investor countries amounted to $804.2 million against $504.4 million in FY 2005-06.

At present, these outflows are overshadowed by huge quantum of inflows, but in the long run the outflows could exacerbate the balance of payments.

Can the government be able to sustain inflows in the shape of privatisation proceeds about which the government is overly confident, and how long they would keep on privatising state-run entities?

There would come a point when all these inflows would dry up; then what would be the alternative source to finance the current account deficit.

It is important to note that in FY 2006-07, the communication sector’s foreign investors remitted $152.5 million, power sector $136.2 million, financial businesses $116.1 million, chemicals $53.2 million, pharmaceuticals and OTC products $51.2 million, petroleum refining $48.7 million, oil and gas explorations $44.8 million, food $38.8 million and tobacco and cigarettes investors remitted back to their countries $33.4 million.

Well-placed sources in the Finance Ministry told ‘The News’ that though, it was largely driven by a burgeoning trade deficit (which during FY2006-07 stood at $13.53 billion), yet, governments lavish expenditure on foreign trips and huge import of luxury cars have also been major factors augmenting the current account deficit to worrisome level.

Sources said that during the period under review, the national exchequer spent nearly $1.6 billion on import of luxury vehicles, more than $831.7 million on cellular phone sets, $1.32 billion on telecom apparatus and about $1.35 billion were paid through exchange companies to foreign countries. Besides, more than quarter of a billion dollars was spent on foreign tours by the President, Prime Minister and cabinet members.

The most depressing thing was that foreign trips remained almost fruitless as no improvement was seen or mentioned about enhancement of exports.

Pakistan during FY 2006-07 missed the export target of $18.6 billion by a wide margin of $1.6 billion by end June 2007.

According to economic experts external disequilibria in the shape of “twin deficits” may have a significant impact on the value of the rupee, a matter attracting keen attention around the country.

Besides, it would translate into a large increase in Pakistan’s net foreign debt position. A large and growing public debt could also eventually put upward pressure on interest rates and crowd out private investment.

http://www.thenews.com.pk/daily_detail.asp?id=66856

 

[Neo]

Sindh’s share in GDP rises to 29pc​

KARACHI, Aug 3: The Sindh’s contribution in the national economy is estimated to have increased from 28.2 per cent in 1999-2000 to 28.6 per cent in 2004-05 and is expected to be around 29 per cent in the 2006-07, revealed a recent study of the provincial government.

In all these years from 1999-2000 to 2004-05, the study says the contribution of industry in Sindh has increased substantially. The share of Sindh agriculture in the national economy has declined. The share of services sector too has come down. The document is yet to come for detailed scrutiny and analysis before the economists and analysts.

For the first time in 60 years history, the Sindh government has taken a major initiative of constructing a Gross Provincial Product (GPP) for an analysis of provincial economy and to measure contribution of various sectors in the national economy.

“This was done in face of the hurdles created by Islamabad,” a senior official said. He disclosed that the Sindh government took up this task sometimes in 1990s but was abruptly stopped by the federal government. But the World Bank took up a study of Punjab economy and gave an estimate of its share in the national economy.

“This report proved to be a green signal for us and we prepared this report,” he said.

According to this study, the contribution of the Sindh-based industry in national industry is 37 per cent while that of services sector is 27 per cent. Agricultural sector’s contribution has been estimated at 22.1 per cent.

In the industrial sector, the large scale industry contributed 49.1 per cent, small scale 31.5 per cent. In agriculture, major crops contributed 16.9 per cent while minor crops 30 per cent. Livestock’s share is 25 per cent but that of forestry is only 0.2 per cent. Fisheries contributed 19.4 per cent.

In the services sector, the finance and insurance contributed 36.9 per cent, wholesale and retail trade 31.1 per cent, transport, storage and communications 27 per cent, ownership of dwellings 23.2 per cent, public administration and defence 15.2 per cent, social services 23.8 per cent.

Carried out by the Sindh Bureau of Statistics under the guidance of provincial Chief Economist Mr Mohammad Ali Khaskheli, the study noted a structural change within the provincial economy since 1999-2000 till 2004-05. The agriculture sector contributed 21.6 per cent in the GDP of Sindh in 1999-2000, it declined to 17.4 per cent in 2004-05. The share of industry grew from 23.6 per cent in 1999-2000 to 29.4 per cent. The share of services sector decreased to 48 per cent from 50.5 per cent in 1999-2000.

The Sindh study estimates are supported to a large extent by the World Bank report on Punjab economy, which noted a major shift of services sector from Karachi to Lahore. Services sector in Punjab is 52 per cent of the total national services sector. A decline in agriculture in Sindh is being attributed to four years drought and its after effects which reduced the water supply.

“But the increasing share of industry in Sindh warrants a further careful study and analysis,” a member of Site Association of Industry said. He agreed that there had been some revival of industry in the province and the landscape on way to Pakistan Steel, Nooriabad, Kotri and a few other places have changed.

“But how far this industrial expansion has provided employment opportunities is a question for which no answer has been provided,” an active trade unionist said.

“The construction of Gross Provincial Product (GPP) series is a large and complex assignment, as disaggregate data are needed for a vary large number of provincial specific variables,” the authors of the study observes at the very outset and then goes on to explain the methodology used for estimating Sindh’s share in the national value added to various economic sectors.

While the authenticity and credibility of the Sindh’s study is yet to go through scrutiny of the economists and businessmen, the initiative seems to have been appreciated by the scholars and analysts at large.

“The regional account of a province aims at giving quantitative picture of the main economic activities in which the province has been involved during a certain period of time, normally a year,” a banker quoted the study itself to justify the document and periodical updates.

Analysts recall that Islamabad had always looked with suspicion any attempt in Karachi, Quetta and Peshawar to quantify the outflow of their resources. A Regional Planning Organisation set up in Sindh during the decade of seventies was rendered dysfunctional on instructions from Islamabad.

Mr Pasha, a noted economist who was associated with a caretaker government and is now a senior official in a United Nations agency was a teacher at the Karachi University. He told journalists that late General Zia ul Haq instructed in early eighties to stop any exercise that aims at monitoring economic indicators at the provincial level.

http://www.dawn.com/2007/08/04/ebr1.htm

 

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India, Pakistan agree to combat trade barriers​

NEW DELHI, Aug 3: The commerce secretaries of India and Pakistan prescribed transparent measures on Friday to combat artificial trade barriers between the two countries and they set up empowered committees to help implement the resolve.

India’s G. Pillai and Pakistan’s Syed Asif Shah led talks at the joint study group (JSG), which met here for the third time since it was formed recently, and both expressed support for a time-bound implementation of their recommendations.

Mr Pillai stressed that the JSG should aim at developing a policy framework to maximise benefits of geographical proximity, identify opportunities for enhancing economic cooperation and create a framework to boost trade in goods including elements such as customs cooperation, standards, and certification system.

Mr Shah agreed and said that in the spirit of the article XXIV of GATT, India should consider creating special provision for giving more market access to Pakistan. The article deals with the special privileges that neighbouring countries could be accorded in bilateral trade. India noted the request.

Mr Shah proposed and the Indian side agreed that sub-groups on Customs cooperation and trade facilitation measures, sanitary and phytosanitary measures, agreement on technical barriers to trade, and standards & conformance should meet every six months to ensure speedy implementation of the recommendations of the joint study group.

Pakistan also wants to set up a sub-group to address the issue of market access rising linked to the agriculture sector in India. Mr Pillai noted the proposal.

The sub-group on customs cooperation and trade facilitation measures agreed: a) To work towards a bilateral agreement on customs cooperation on specific bilateral issues; b) To constitute a Customs Border Liaison Committee at Attari-Wagah border to meet once in two months to resolve the operational issues at the field level; c) To work towards electronic exchange of information, including verification of adherence to the Rules of Origin; d) To meet at a six-monthly interval alternatively in India and Pakistan.

It was also agreed to exchange a list of 20 products of export interest to both sides by 31 August 2007 and prepare a compendium of procedures for their trade facilitation. Though this would be a continuous process, efforts would be made to complete the exercise and place it on their respective websites by 31 December 2007.

The Non-Tariff issues associated with the identified commodities or any other product would be exchanged by 30 September 2007 and the issue would be resolved in the working group scheduled to meet in November 2007.

To facilitate export of cement from Pakistan to India, it was agreed to finalise the process of certification of the three Pakistani cement factories, from which samples have already been taken, by September 15, 2007.

For the purpose of harmonisation of standards it was mutually agreed that initially standards for cement would be taken as a pilot project, to be extended to other products up for trade.

http://www.dawn.com/2007/08/04/ebr3.htm

 

[Neo]

Sindh govt plans sale of assets worth billions​

KARACHI, Aug 3: The Sindh Privatisation Commission (SPC) will soon invite Expressions of Interest (EoIs) for the sale of billions of rupees assets of the defunct Sindh Road Transport Corporation (SRTC) and grain silos constructed but left incomplete by the NLC on Superhighway near Karachi.

The marketing activities of the Sindh Privatisation Commission (SPC) had slowed down during last year owing to resignation of its private sector chairman Tariq Amin in June 2006. The SPC board now has recommended name of the new chairman which awaits approval by the chief minister.

The SPC chairman resigned about a year ago on reasons of preoccupation, but notification about acceptance of his resignation by the chief minister took about one year paving the way for a new entrant.

However, a heavy agenda of privatisation awaits the new chairman which include sale of assets of the defunct SRTC; sale of wheat silos, prime farm land belonging to the Sindh Board of Revenue and a printing press in Hyderabad.

The assets of SRTC include 50 shops at a bus terminal in Jacobabad, a shopping plaza at SRTC terminal in Hyderabad, a residential house in Lateefabad, Hyderabad and a bus terminal at Sukkur.

Earlier, bids were invited for sale of SRTC assets and silos were far below the benchmark price fixed by the SPC and hence the sell-off was postponed.

However, the PC board recently decided that the SRTC assets should first be offered to the city district governments in respective towns on market rates so that their land-use plan is not disturbed. If the district governments refuse the offer, the assets would be offered to the private sector.

The SPC owes Rs662 million to the ministry of finance for payment made to the employees of the SRTC which closed operations in December 1993 on account of golden handshake scheme. The amount will be paid to the ministry after the assets are sold.

All decisions made by the SPC are subject to approval by the Sindh Cabinet Committee on Privatisation.

Giving details of the efforts for privatisation of the government assets, sources at the commission told Dawn that the SPC also initiated the process of privatisation of Lakhra Power Generation Company and Lakhra Coal Development Company.

The sell-off process could not progress as central government decided that assets of Lakhra Power Generation Company should be handed to Wapda since it has majority shareholding in two coal mining power companies.

Privatisation of Silos: The construction of 16 grain silos was undertaken by NLC at a cost of Rs50 million on a land provided by the Sindh government. On completion of 47 per cent work at a cost of over Rs47.2 million, the construction was abandoned by the NLC. The concrete structure of 11 silos was completed while foundation of five silos dug up. The machinery of the project is lying on the site.

The ECC of the cabinet in Islamabad decided to hand over silos along with machinery of the project packed in containers to the Sindh government. The valuation of the property on the prevalent market price is being carried out following which the property would be placed for auction.

The commission will invite expressions of interests from prospective investors for submitting an integrated development plan for using the property as whole i.e. land, structure, machinery and equipment.

The other assets due for sell-off by the commission include 75 acres of the Board of Revenue land in Deh Shah Mureed. The commission decided to divide the land into small plots of 15 acres each for sell-off.

Meanwhile, Mirza Ikhtiar Baig, a prominent businessman and member of the board of Sindh Privatisation Commission, told Dawn that the commission had been non-functional for quite some time due to resignation of the chairman and preoccupation of the Sindh finance minister who chairs the meetings of the commission.

He said the SPC had assets worth billions of rupees, including properties of the defunct SRTC, and incomplete grain silos with unpacked machinery.

He suggested that the silos should be handed to the ministry of agriculture for storage of grain if the assets do not get a good sale offer.

http://www.dawn.com/2007/08/04/ebr4.htm

 

[Neo]

Business policy moot on Microfinance: SBP encourages developing alliances, says Dr Shamshad​

KARACHI: Governor State Bank of Pakistan (SBP) Dr Shamshad Akhtar has said SBP encourages delivery of microfinance to the borrowers by moving away from the traditional means and encourages developing alliances among the active players in this sector.

Leading the roundtable on ‘Microfinance - Improving Outreach and Possible Solutions to Enterprise Financing’ she appreciated this important initiative taken by Centre for International Private Enterprise (CIPE) and assured SBP’s full support. The roundtable was organised Thursday by the CIPE, an affiliate of US Chamber of Commerce.

A large number of eminent personalities from financial and professional circles attended, including women entrepreneurs, representatives from business associations and donor agencies.

Dr Akhtar was of the view that venture capital funds for microfinance industry should be set up and money pools should be developed for specialised microfinance institutions. She supported the idea of developing instruments against which microfinance banks and institutions can borrow funds at market rates.

In his welcome address Country Director, CIPE, Moin Fudda, said microfinance is relatively a new sector with high growth potential and effective collaborative efforts in the microfinance sector would have a larger economic impact. There is a strong need to build a platform to develop a dialogue among stakeholders for effective policy making in this sector.

It was agreed that microfinance programmes in Pakistan have reached a point that warrants consolidation, if outreach has to be increased within a short period of time to meet the stiff challenge of multiplying it to three-folds. Simultaneously, issues such as deepening the microfinance system into the MSE sector, creating an enabling environment both for the enterprises and microfinance banks and institutions; developing home grown models for MFIs to suite Pakistan’s norms for microfinance banks’ and institutions’ framework, processes, and products to achieve higher organisational and financial stability; and strengthening coordination (value chains) between various stakeholders for higher synergy for all are ought to be addressed to ensure the wider impact of microfinance in the country, and the success of this sector is based on financial viability and commercial sustainability of microfinance institutions.

Other speakers who shared their expertise on this topic were GM Pakistan Microfinance Network (PMN), Syed Mohsin Ahmed, Chairman Modarba Association of Pakistan, Basheer A Chowdhry, Member CIPE Project Advisory Committee, Shamim Ahmed Khan, Director Operation and Policy Reforms CIPE, Steve Rogers and Senior Programme Officer for South Asia, CIPE Andrew Wilson.

In his address, Wilson said collaborative efforts are required to facilitate the informal sector so that it may directly contribute in the economy and gradually become part of the formal economy.

Endorsing the recommendations received from the stakeholder, Governor SBP agreed to form a consultative group comprising the microfinance banks and the Pakistan Microfinance Network, led by SBP to take these recommendations to a more concrete conclusion.

http://www.dailytimes.com.pk/default.asp?page=2007\08\04\story_4-8-2007_pg5_1

 

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Credit rating at all time high, says Dr Shah​

KARACHI: Advisor to Prime Minister on Finance Dr Salman Shah has said that credit rating of the country is at an all time high level because of prudent and vibrant economic policies.

Speaking to members of Karachi Stock Exchange (KSE) here on Friday Dr Shah spoke at length on the economy of the country, which according to him has been outperforming for quite some time because of better economic management system.

Listing various indicators of the growing economy, he pointed out that the best performing Karachi Stock Market is among the various indicators of the fast developing economy of the country. Dr Shah said though there was market crash in March 2005, $35 billion more were added in the market capitalisation since then which reflects the investors confidence in the country’s capital market.

He pointed out that the total capitalisation of the market is about 40 percent of GDP of the country, which needed to be increased to over 100 percent like the some other markets in the world. This could be done through more IPOs and listing of more companies in the stock market, he added.

Dr Shah said overseas road shows to project the country’s economy have received overwhelming response and asked KSE to hold such shows in the country so that participation of the people from all over the country could be encouraged.

He underlined the need for further development of country’s capital market so that it could be ranked among the leading global markets. Earlier Chairman KSE Shaukat Tarin in his address said that like the fast improving economy, KSE also outperformed and became fast emerging market of Asia.

He said that in the last five years, annual average growth was 51 percent while market capitalisation also registered 47 percent growth during this period as well as volumes also surged. About the future plans, Tarin said that stock market is going to have its new managing director by end of this month and embarked upon capacity building measures.

http://www.dailytimes.com.pk/default.asp?page=2007\08\04\story_4-8-2007_pg5_3

 

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Imports of computer equipment fall by15.8%​

KARACHI: The total import value of computer equipment in the country has declined by 15.8 percent due to the 15 percent general sales tax (GST) imposed on the imports of these items in the last budget.

This is concluded by a report compiled by Pakistan Computer Association (PCA). It further revealed that the imports for the period July-June 2006-07 stood at Rs 1.26 billion.

By assuming that actual 2007 figures will be closed to the projected data we can say that IT industry was growing till 2006 since market consumption was reflected by imports. But the expected figures for 2007 are lower than 2006 and even lower than 2005. The projected figures for fiscal year 2007 are Rs 1.26 billion as against Rs 1.46 billion in 2006 and Rs 1.42 billion in 2005. In 2007, figures are 13 percent lower than 2006, however they were expected to be higher. The imposition of 15 percent GST on imports of these components results in declining orders on the part of importers, which created a gap between demand and supply.

Taking advantage of this opportunity, the smugglers became active to fill this gap incurring loss to the government’s revenues.

As allowed by CBR, passengers travelling from abroad, can travel with two laptops in their personal baggage. “Passengers are travelling with Rs 1.5 million worth of computer parts,” said President PCA Munawar Iqbal.

Pakistan is completely dependent on imports to fulfil its computer equipment requirements, as not a single component is manufactured in the country.

Due to the CBR policies in the recent budget, corruption is increased in the IT industry in Pakistan. The IT equipments are beyond the reach of common user. During the last one year of discussions the government’s representatives stressed on the PCA to produce data, which would support the stance of the IT community that increases levies on import and has affected the growth of the industry. According to the Global Competitiveness Report 2006-07 published by the World Economic Forum (WEF), Pakistan ranks 91 in the global competitiveness index rankings in comparisons with 125 countries.

According to WEF report, personal computer density stands at 0.4 per 100 persons, while Information and Communication Technology (ICT) remains at 64 amongst the list of 125 government priorities. Government’s progress is ranked 47 in the list of 125 countries.

http://www.dailytimes.com.pk/default.asp?page=2007\08\04\story_4-8-2007_pg5_5

 

[Neo]

UK firm to establish 400mw power plant ​

KARACHI (August 05 2007): Sindh Coal Authority (SCA) signed a Memorandum of Understanding (MoU) with Couger Energy, of UK, to develop a 400 mw power station at an estimated cost of $400 to $500 million by introducing 'Underground Coal Gasificaiton' (UCG) technology in Thar coal field.

Abbas Ali Shah, Director-General, SCA, and Ashraf Khan, Country General Manager, Couger Energy, signed the MoU here on Saturday at Sindh Secretariat building. Under the MoU, Sindh government will allocate an area of 50 sq km in Block III of Thar coal field for development of coal deposits within two weeks after signing the MoU.

A joint survey team comprising technical personnel of the company and Sindh government will demarcate the area. According to the MoU, Cougar Energy will arrange investment and introduce UCG technology for development of coal deposits and establish 400 mw powerhouse besides organising application for gasification of coal on 'Built-Own-and-Operate' (BOO) basis in accordance with policies and procedures of federal and provincial governments, particularly the Power Policy of 2002.

Couger along with other private and public sector sponsors may incorporate a company as 'Operator in Pakistan' for implementation of proposed power plant. It will apply for 'Letter of Intent' to the Private Power and Infrastructure Board (PPIB), Ministry of Water and Power and Ministry of Petroleum and Natural Resources, according to policies with request to allow utilisation of UCG technology, establishment of coal-based power stations and piping of gas produced.

Sindh Coal Authority will support and assist in this regard. This is one of the latest clean coal technologies being used in the whole region.

MoU will be valid for 18 months from the date of its signing and will be completed in phase-wise programme. SCA will approach Sindh Directorate of Mines and Minerals Development for grant of licence and subsequent mining lease.

The ceremony was attended by Sindh Mines & Mineral Development Minister Irfanullah Khan Marwat, Secretary Mines & Mineral Development Abdul Hamid Akhund, Khalid Mirza Chief Inspector Mines and Managing Director Cougar Energy Alan Walker.

http://www.brecorder.com/index.php?id=601120&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Leather sector out of billion-dollar export club ​

KARACHI (August 05 2007): Leather trade has gone out of the $1 billion exports club due to government indifference, inefficient marketing strategy and rising cost of doing business, exporters said on Saturday. "Leather is one of the major industries of the country, which has also been a member of billion-dollar export club for past some years.

However, the internal and external problems have kicked this important sector out of the billion dollars exports club," they said. They said that the country's leather garment exports, including tanned leather and leather manufactures declined by $166 million to $848.860 million during last fiscal year against $1.014 billion of 2005-06.

They said that the major reason behind this setback was the rising cost of doing business, besides government's inattention towards it. "Government's focus is on providing textile and other sectors with maximum facilities, whereas demands from leather sector always go unheard in the corridors of government, as ministry of textile and commerce have been indifferent to it," they said.

Despite several requests, the federal government did not take a single step to resolve the issues faced by this sector, bringing the sector on the verge serious crisis, and the growth ratio is declining rapidly.

"If the government continues its present policy of negligence towards this sector, export ratio of leather products will consequently fall to zero," exporters said.

They said that during June 2007 leather exports slumped by $17.670 million to $72.643 million as compared to $90.313 million during June 2006. The country is also losing its leather exports' share rapidly in the world market owing to rigorous competition, which has emerged as a huge threat for survival of local leather industry, they said, adding that "leather industry is unable to yield positive growth in the absence of government support".

They demanded that the government should take immediate action and provide some facilities to the leather sector to meet international requirements and once again achieve the one billion-dollar mark.

It may be mentioned here that the country has some limited exports items, which do over one billion-dollar exports every year. Till last fiscal year leather products, readymade garments, bed-wear, knitwear, cotton cloth, cotton yarn and rice were the members of one billion-dollar export club.

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Cement export to India to start next month ​

NEW DELHI (August 05 2007): The first consignment of Pakistan cement would reach India by September after completion of certification formalities, said visiting Commerce Secretary Syed Asif Shah.

He told newsmen on Saturday before leaving for Islamabad after attending talks with his Indian counterpart on economic, commercial cooperation, he said currently, Pakistan has surplus cement of about 14 million ton for export. Pakistan would be able to produce 9 million tons more cement by year 2009 which will enhance country's export capacity, he added.

On imports from India, Asif Shah said most of commodities are in raw form including chemicals, which help us produce finished products to earn foreign exchange. He hoped following purposeful talks with Indian officials, the trade gap of about $800 million between the two countries would be minimised.

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Three sites for establishment of ROZs identified ​

PESHAWAR (August 05 2007): NWFP Governor Ali Mohammad Jan Aurakzai has said that the government is planning to establish three 'Reconstruction Opportunities Zones' (ROZs) at Shah Kas (in Khyber Agency), Hangu and Bannu to generate economic activities and employment opportunities for the people.

Addressing the Fourth Gold Medals and Export Trophy Awards ceremony held here under the auspices of Sarhad Chamber of Commerce & Industry (SCCI) at a hotel on Friday night, he said that the products of such zones would be exported to the United States.

He said that the provincial government has decided to upgrade all existing industrial estates by way of providing modern infrastructure and allied facilities, and added that Hattar Industrial Estate in Haripur had been declared as a Model Industrial Estate where improved infrastructure would greatly benefit the industrialists.

The Governor said that the events which followed the 9/11 had greatly affected the congenial atmosphere of NWFP and FATA. However, the government was fully cognisant of the situation and was taking concrete steps to restore normalcy so that business and industrial activities cold flourish without any hindrance, he added.

The increase in police force of the province and retrieval of Frontier Constabulary personnel from other provinces and their deployment in NWFP are some of the steps that have been taken in this regard. He said that the government firmly believes in providing investment-friendly environment to both local and foreign investors and, as a result, Pakistan has now become the hub of over 600 foreign companies primarily due to the liberal investment policies.

Aurakzai said that revival of economy of Pakistan is indeed a success story which is closely linked to the volume of increase in exports over the years. In the process, he said, the Federal Government has taken many bold and futuristic decisions and, by doing so, it has ensured a bright future for the countrymen. Indeed, he remarked, as a result of consistent and steadfast policies of the government, the country is now witnessing positive results.

Referring to the export sector, he said that previous successive governments had been laying emphasis on certain traditional exports, like textiles, rice, leather goods, etc, and now the country is facing stiff competition in these products. Therefore, he remarked, "we have to explore new avenues and expand the list of our exports".

The development of non-traditional sectors, like minerals on scientific lines could help earn foreign exchange beyond expectations. In this connection, he particularly mentioned the mineral deposits, and added that the wealth hidden in NWFP and FATA can change the very destiny of the people.

On this occasion, seven gold medals and winners and runners up trophies in 25 different categories were given to best exporters, entrepreneurs, tax payers and manufacturers of 2005-06 in the province. Taba family; owners of Gadoon Textile Mills and Lucky Cement Factory; followed by Khyber Trading Company and Muslim Commercial Bank and Bank Al-Falah maintained their honours of the past year in this mega event, too. The Governor handed over the awards to the winners on behalf of the Sarhad Chamber of Commerce and Industry.

Earlier, Liaquat Ahmad Khan, President of Sarhad Chamber, Ilyas Ahmad Bilour, and Muhammad Asif, Chairman of Awards Distribution Committee addressed the function and highlighted the role of the SCCI in promotion of trade and business activities in the province. They particularly talked of the role of the Export Trophy and Businessman of Year Gold Medal Award and said that the event has been widely recognised at every level not only towards the encouragement of entrepreneurs but also promotion of economic activities in the province and generating precious foreign exchange for the country. Large number of businessmen, industrialists, bankers and exporters attended the ceremony.

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