Pakistan Economy - News & Updates - Archive

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ISLAMABAD (May 09 2006): Pakistan exports $250 million fans during the current year to different countries, which has exceeded the set target for the ongoing year. The industry is exploring the international market to increase its market share.

Demand of Pakistani fans to Middle East, Saudi Arabia, Australia, Iraq, Bangladesh and Russian have increased, PTV reported. England and Africa had also shown interest in Pakistani fans, the report added.

Presently, the fan industry is not only fulfilling the local demand but it has also increased its international market share due to its better quality.

Thousands of fan manufacturing units are operating in the country. About 90 percent of those are in Gujrat providing thousands of job opportunities to the people. President of Fan Industry Gujrat Anjum Rafique said the business-friendly policies of the government had helped the growth of the industry.

ISLAMABAD (May 09 2006): Pakistan exports $250 million fans during the current year to different countries, which has exceeded the set target for the ongoing year. The industry is exploring the international market to increase its market share.

Demand of Pakistani fans to Middle East, Saudi Arabia, Australia, Iraq, Bangladesh and Russian have increased, PTV reported. England and Africa had also shown interest in Pakistani fans, the report added.

Presently, the fan industry is not only fulfilling the local demand but it has also increased its international market share due to its better quality.

Thousands of fan manufacturing units are operating in the country. About 90 percent of those are in Gujrat providing thousands of job opportunities to the people. President of Fan Industry Gujrat Anjum Rafique said the business-friendly policies of the government had helped the growth of the industry.

 

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BEIJING (May 09 2006): China will provide substantial support to Pakistan bringing the life in the quake-hit areas to normal, by rehabilitating and up-grading the 700-kilometre Karakoram Highway (KKH) as early as possible.

The necessary funding for undertaking this gigantic task has already been committed by the Chinese government said a senior official of the Chinese Commerce Ministry.

"We know the urgency of the matter, since the earthquake caused massive landsliding at various places on the KKH that provides main communication link promoting socio-economic activities in the area," the official said adding "there will be no delay on our part in starting the work."

Talking to APP here on Monday, he said "The Chinese side is actively working with the relevant authorities in Pakistan for preparing the feasibility report and other necessary infrastructure data".

Meanwhile, Pakistan's Ambassador to China, Salman Bashir said Pakistan is in the process of finalising the technical studies to upgrade the highway. He said, "we also envisage building tourist resorts, motels and fuelling stations to enable tourists to enjoy the natural splendour of the Northern Areas of Pakistan".

In an interview with China Highway Cultural magazine, he said the estimated cost of the up-gradation is over 400 million dollars. "We want to upgrade the KKH to serve both China and Pakistan in line with our vision for enhanced economic, trade and energy co-operation in the 21st Century and realise the goal of greater regional co-operation," the ambassador added.

Recently, he said both Pakistan and China have decided to enhance traffic on the KKH by starting a regular bus service with effect from June 1. A regular freight container service has already started from this month.

The KKH is the greatest symbol of Sino-Pak friendship also needed immediate up-gradation to cater traffic especially from China, Kazakhstan and Kyrgystan. The KKH has assumed great significance after the construction of Gwadar seaport, since all traffic to the Central Asia to be routed through it.

 

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Tuesday May 09, 2006

ISLAMABAD: Federal Minister for Water and Power Liaqet Jatoi has said that demand for electricity is increasing more than 10 per cent annually due to industrial progress in Pakistan.
He was addressing two-day Central and Southern Asian Electric Trade Conference here on Monday.

Delegates from Kirghizstan, Tajikistan and Afghanistan besides World Bank attended the conference.

Jatoi said that cement, fertilizer and other industries were rapidly progressing in the country due to which power demand has increased over 10 per cent annually.

We have opportunities to import electricity from Central Asian states Kyrghytan, Tajikistan and Afghanistan to meet increasing power need in the country, he added.

Jatoi went on to say that electricity will be supplied every where in the country by 2007 under Roshan Pakistan program.

He asked World Bank, Asia Bank and Islamic Bank to provide capital for the investment in hydropower sector in Pakistan because there are great opportunities of generating electricity through hydropower in the country.

The Minister said that Diamir Bhasha Dam has been inaugurated in this regard, which will generate 4500 MW.

He noted that Central Asian states can get transit trade benefit after the completion of Gwadar Port.

Jatoi observed that country’s economy was rapidly progressing and GDP reaches 8 per cent due to government’s successful policies.

 

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Tuesday, May 09, 2006

KARACHI: Lap joint modification work on the first Boeing 737 aircraft is underway at Pakistan International Airlines (PIA) engineering department.

According to a press release on Monday, due to indigenous efforts, PIA would save an amount in terms of labour cost per aircraft $100000, while approximate 15 days saving and a total saving per aircraft will come around $300000. After completion of this modification, PIA will be able to sell this expertise to other airlines of the world and earn valuable foreign exchange, it added.

Boeing during their continual in-service research for development discovered invisible cracks on the Lap-Joint areas of aircraft B-737. Boeing has necessitated modification to the areas identified critical prior to accumulation of 50,000 Flight cycles on all B-737 aircraft worldwide.

Boeing 737 aircraft were inducted in PIA fleet 1985 as a regional commuter. Due to short hop flights, frequent take off, and landings, the aircraft accumulates a high number of flight cycles. Currently PIA B737 aircraft are approaching 50,000 flight cycles.

 

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Tuesday, May 09, 2006

By Maryam Hussain

ISLAMABAD: Pakistan suffered an exchange loss of over Rs 60 billion in the post nuclear test period from May 1998 upto June 2001 on account of open market operations including currency swaps, says the Auditor General of Pakistan. This needs to be explained, the AG will say before the Public Accounts Committee (PAC) of Parliament in testimony today (Tuesday).

The AGP claims that the State Bank of Pakistan (SBP) has made a startling disclosure after 8 years before the PAC that the nuclear tests of May 28, 1998, cost the taxpayers of Pakistan about Rs 22 billion on account of purchase of dollars from the open market at much higher than the then market rates. The SBP admits that following Prime Minister Nawaz Sharif’s decision to freeze foreign currency accounts and subsequent economic sanctions of G-7 countries, the Finance Ministry under Sartaj Aziz approved the buying of dollars at much higher rates than those prevailing in the market to maintain reserves and pay foreign debt to avoid default on debt payments.

Sources told Daily Times that top SBP bosses have for the first time ever confessed in writing to the PAC that about $14billion were purchased at much higher than market rates during 1998-2004 which resulted in a collective loss of about Rs20 billion. Reportedly, upto Rs 2 per dollar were paid over and above the market rate of a dollar.

These dollars were purchased from some powerful industrial and business groups of Karachi, private banks and Dubai-based parties, and they were paid about Rs 20 billion in addition to the conversion rate of dollars purchased. Even after so many years, SBP is still reluctant to disclose the names of these groups and dealers, say insiders.

The policy of Nawaz Sharif to start buying dollars from the open market at much higher than market rates is said to have continued until 2004. While Shaukat Aziz was the finance minister, the SBP also purchased $12 billion from the market on higher than market rates, says the AGP – only about $2 billion were purchased from the market at above market rates during the Nawaz government, says the AGP.

To justify the buying of dollars at higher rates, the SBP bosses have claimed that Nawaz Sharif’s decision to freeze foreign currency bank accounts led to a drastic fall in remittances after the G-7 slapped sanctions on Pakistan. To maintain the required level of foreign reserves, the Finance Ministry approved buying dollars from the open market by paying a Rs 20 billion premium on these dollar purchases.

 

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MANGO occupies second position after citrus in terms of area and production. Its output is low at 9-10 tons/ha, considerably less than the potential 20 tons/ha yield.

The problems of post-harvest losses include improper handling, immature fruit harvesting, and inadequate transport and storage facilities. Mango faces extreme price fluctuation due to seasonal and the perishable nature of fruit. Being highly perishable, it has to be sold and consumed in a shorter period of time.

It is found that the majority 75 per cent contractors harvest the fruit with long sticks in a ‘Jholi’ - locally-made bag. Through this method, there are a lot of chances of fruit getting dropped on the ground. While 25 per cent use a similar bag with a cutting blade.

Handling operations are carried out immediately after harvesting as a practice rather than keeping the fruit for 24 to 48 hours prior to packing. Immediate handling after harvest gives a longer period for marketing and subsequent retailing and provides consumer better quality fruit. About five labourers are needed for handling one truckload in a day. The daily average cost of labour ranges from Rs80 to 100 depending on the availability and work efficiency of labour.

Grading: All respondents (according to a survey) do the grading to fetch better price of their produce. Results also show that the majority of contractors, 74 per cent made three grades: Special, ‘A’ and ‘B’ grades. For Special grade, top quality mangoes are selected and packed separately. This quality of mango is normally bought by exporters.

The other two grades ‘A’ and ‘B’ are usually sold in open auction in wholesale and terminal markets and supplied to inter-regional markets. It is observed during the survey that whenever un-graded mangoes of any variety are presented for sale, these could not achieve a higher price than grade ‘B’ mangoes. Contractors report that about two experienced labourers are needed for grading one truckload in a day. The daily cost of labour ranges from Rs120 to 150.

Packing: Careful packing of mango is necessary to keep the fruit in place with minimum shaking. The fruit is normally packed in layers in crates and in each layer fruit is packed alternately placing the beak of one mango in between the shoulders of two mangoes. This method of packing is easy and quick to follow. This also provides enough room to each individual fruit without compressing it.

About 95 per cent respondents in the survey reported that they use traditional wooden crates in packing. The average weight per crate of mango is about 12 to 13kg, but the number of fruits per crate varies by grade and from variety to variety. It is observed that five per cent contractors bring mango in gunny bags of 100kg weight and unload these bags like wheat grain on auction floor thus damaging the fruit with high wastage rate.

Ripening: Mango storage for ripening should be done in a room with special features. It should be air-tight and warm. This helps in ripening the fruit uniformly and quickly. Contractors pack mango in crates and use chemical locally called ‘Karpet’ for quick ripening.

Mostly chemical is used when the fruit is supplied at long distance markets. In local markets, the wholesalers purchase mango and pack again with chemical for ripening. Wholesalers use traditional method for ripening, pack in mud pitcher locally called ‘Mutt’. Through this method, wholesalers save money on crates for packing time to time because mud pitcher can be used several times and even in subsequent seasons. Mangoes are mostly ripened with four to five days.

Information collected from the contractors and analysis helped in assessing the post-harvest losses of mango on per acre basis. According to estimates, the total post-harvest losses are recorded at 27.51 crates per acre during the mango season 2004-05, including 12.78 crates in harvesting, 2.38 in handling, 0.44 in packing, 1.11 in loading, 6.63 in transportation, 2.30 in unloading and 1.87 in late auction.

The value of post-harvest losses is calculated on per acre basis. Total losses are recorded at Rs4,183 per acre including Rs1,943/acre in harvesting, Rs362/acre in handling, Rs67/acre in packing, Rs169/acre in loading, Rs1,008/acre in transportation, Rs350/acre in unloading and Rs284/acre in late auction (table 1).

Value of post-harvest loss in Sindh: The post-harvest loss of mango in Sindh during 2004-05 is estimated at 27.5 crates per acre.

Conclusion and recommendations: The main purpose of this study was to estimate post-harvest losses of mango during the 2004-05 seasons. In all 100 contractors were interviewed. The study findings reveal that contractors usually harvest immature fruit in the early season and over-mature at the end of the season to obtain higher prices.

In both the circumstances external appearance of the fruit is made attractive by forced ripening in early season, whereas it is delayed by excessive irrigation in late season.

Careless harvesting and rough handling bruise and scar the skin, thus reducing quality and market price. Such damage does not attract international buyer thus bringing less profit in export proceeds and also earns bad name for the country.

Post-harvest losses of mango are estimated at 6.94 per cent of the total production. The highest loss accounted 3.22 per cent in harvesting followed by 1.67 per cent in transportation, 0.60 per cent in handling, 0.58 per cent in unloading, 0.47 per cent in late auction, 0.28 per cent in unloading and 0.11 per cent in packing.

However, it is estimated that an average contractor lost Rs4,183 per acre during 2004-05. The value of post-harvest losses of mango is estimated at Rs486.506 million in Sindh and Rs1,064.939 million in Pakistan.

The main constraints identified are lack of infrastructural facilities, knowledge and information among farmers. Infrastructural development is normally a government issue, while the problem of lack of information and knowledge can be overcome by various forms of training programmes and information availability. Information on various post-harvest technologies is complemented by prioritized research and development.

About 46 per cent of the total post-harvest losses occur due to traditional method of harvesting. These losses may be overcome through adoption of modern technology for mango harvesting.

However farmers consider that the post-harvest losses of mango are inevitable. In this connection the Agriculture Department should take concrete steps to inform farmers about the benefit of reducing the post-harvest losses and help them understand that there are effective ways to reduce loss and increase income.

There is need to improve the existing harvesting, grading and packing and the presentation method. In addition, the government needs to provide basic infrastructure like storage, handling, grading, packing, transport and marketing facilities and technical expertise. This could be carried out by the public and private sectors.

 

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QUETTA, May 8: Balochistan Chief Minister Jam Mir Mohammad Yousuf has urged local and foreign investors to avail tremendous opportunities offered by the province in various sectors.

Speaking at the opening session of the two-day international seminar on “Economic development strategies for Balochistan,” the chief minister identified health, education, mineral, livestock, agriculture etc., as potential sectors for making investment and said that the government would extend every help in this regard.

“We are paying full attention to the health, education and developing infrastructure to pave the way for foreign and local investment in the province,” Yousuf added.

The seminar was jointly organised by Balochistan University of Information Technology & Management Sciences and Hanns Seidel Foundation, Islamabad. Renowned economic experts and scholars from Germany, China, Iran, Oman, Russia and Pakistan were participating in the seminar.

Mr Yousuf said that the government was giving top priority to mega projects and socio-economic development of the province and was also implementing comprehensive policies to explore natural resources of the province.

He said that Balochistan, bordering with Iran and Afghanistan, was enjoying great importance due to its geo-political strategic location and having long coastline all across the Arabian Sea would prove a gateway of industrial and economic activities in future. “It would also become a corridor for central Asian states to access the warm waters of the Indian Ocean,” he added.

Referring to the mega projects launched by the federal government, he said that with the completion of Gwadar port, the province would prove to be the future’s main gateway of Pakistan for boosting trade and economic ties with central Asian states and other countries of the region.

“Gwadar Port would prove a multidimensional centre and would play a vital role in trade linking between South and Central Asia and rest of the world,” Jam Yousuf said and added that it would also help in development of the entire region.

Jam Yousuf said that government always welcomed healthy and positive criticism believing that difference of opinion was part of the democracy but the elements chosen path of violence for the achievement of their goals could not be accepted.

BUITMS Vice-Chancellor Dr Mohammad Abbas Chaudhary in his welcome address highlighted the significance of mega projects in the economic development of the province and said that besides Gwadar port, Pakistan should have built more such ports along with the coastline of Balochistan.

 

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RAWALPINDI: May 09, 2006

President General Pervez Musharraf on Tuesday pledge bring about socio-economic development in the tribal areas through introduction of political and administrative reforms, aimed at opening up economic opportunities curbing extremism and mainstreaming the region.

Chairing a meeting, convened on an all-encompassing approach for paving the way for long-term development of the federally administered tribal areas, the President also reiterated the governments commitment to reforming and revitalising the administrative system.

Prime Minister Shaukat Aziz also attended the meeting, which deliberated on a host of measures to address extremism and terrorism through fast-track economic development of the people.

The meeting reviewed measures aimed at strengthening the administrative system, political structure and development of the areas.

The holistic strategy encompasses a three-pronged approach, including administrative, political and economic.

"The majority of people in the tribal areas are moderate and pro- development - but they have been held hostage by a handful of extremists we to encourage the progressive people to come forward through employment generation, better education and health facilities that is the way forward sustainable progress," said the President.

He particularly highlighted the importance of special economic opportunity zones and these would help generate employment and economic activities at the grassroot level.

 

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ISLAMABAD (May 09 2006): The government is likely to club three Chinese companies for the award of 969 MW Neelam-Jhelum hydropower project, which has already been delayed due to the slackness of Water and Power Ministry.

Sources told Business Recorder that three Chinese firms, CWE (NJ) and the CGGC-CMEC consortium, which were both in competition to take the project, had approached the government's top leadership in this regard.

"The government has decided to award the Neelam-Jhelum project contract to those three companies, which have already submitted their bids," said a top Wapda official.

The project was initially approved by Ecnec on December 31, 1989 with the cost of Rs 15.012 billion, which was later revised to Rs 84.5 billion, with Foreign exchange component (FEC) of Rs 46,667.70 million. Local component of the cost was to be met from Wapda's own resources and FEC through foreign aid.

The estimate was again revised to Rs 95.36 billion. Wapda invited expressions of interest in June 2002. But the process was abandoned because of unsatisfactory response.

Subsequently, Wapda started entertaining unsolicited proposals, as a result of which, 13 companies submitted their documents, out of which Wapda short-listed four Chinese companies.

The early completion of the Neelam-Jhelum hydropower project is very necessary, as otherwise India might take lead in using the Indus water if it completes the Kinshanganga project, under Indus Waters Treaty 1960, prior to Pakistan.

In February last year, the Economic Co-ordination Committee (ECC) of the Cabinet, had authorised the Finance Division to issue sovereign guarantee for raising the supplier's credit, as a special case, to expedite implementation of the project.

Sources said that CGGC-CMEC consortium had not submitted tender security and was also deficient in other areas. However, CWE (NJ), a joint venture, while providing tender security, has based its tender on buyer's credit to meet the foreign currency exchange requirement of the project instead of supplier's credit.

On the recommendations of the Ministry of Water and Power, the ECC changed the financing terms, from the supplier's credit to bidder's credit.

However, at a later stage, Wapda, Ministry of Water and Power and Nespak rejected the bid documents as per provision of the tender terms.

Sources said that the government is now ready to award the contract jointly to the three companies, for which a Memorandum of Understanding (MoU) is likely to be signed during the forthcoming visit of President Pervez Musharraf to Beijing.

They said that a French firm, Vincy, was also interested in getting the project, for which tender date was extended twice to accommodate it. They added that the company was seeking amendments in the bidding documents, especially with reference to the 'arbitration clause', but did not apply by due date. "The project is of a sensitive nature for Pakistan, as India is constructing 330MW Kinshanganga hydroelectric power project on river Neelum in occupied Kashmir, and any further delay would be considered as criminal negligence," sources said.

 

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ISLAMABAD : Prime Minister Shaukat Aziz has reiterated the government’s commitment to bring about a meaningful change in the life of people of Balochistan.


He was talking with former prime minister Mir Zafarullah Khan Jamali, who called on him here on Sunday at the Prime Minister’s House. They also discussed the domestic political situation and the party’s internal matters.


Highlighting the importance of development projects in Balochistan, Prime Minister Aziz said that the government was investing Rs140 billion in mega projects in the province, adding that the government had allocated 56 per cent of the Khushaal Programme Fund for benefiting the people at the grassroots level.


The province would be totally transformed after the completion of the Gwadar port, he said.


The PML, Mr Aziz said, had a democratic ethos and it would emerge as a more united, stronger, coherent and democratic party after party elections scheduled to be held in August.


He said that real democracy in the country was impossible if political parties themselves did not go implement democracy in their own ranks.

Stressing the need for re-organising the ruling PML, he said that the party polls would enable the party to contest the electoral arena in 2007 with confidence, adding that it was equally important to streamline and expand the party’s membership.


Mir Zafarullah welcomed the prime minister’s decision to incorporate the party’s inputs in the next budget and said it would make the exercise of budget making more realistic, people-friendly and balanced. Prime Minister Aziz said Sunday that the government was keen to promote democratic culture in cooperation with the opposition.


He was talking to federal Minister for Political Affairs Amir Muqaam here on Sunday at the Prime Minister’s House.

The Prime Minister said the government expected the opposition and the media to help the government to strengthen democratic institutions and promote politics of tolerance.


He directed Amir Muqaam to closely monitor the performance of federal government departments in the NWFP, making them more efficient and responsive to public needs.

The federal Minister for Information and Broadcasting Mohammad Ali Durrani also attended the meeting.

 

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Panel set up for 1000mw Tajikistan-Pakistan grid
ISLAMABAD (May 10 2006): Pakistan, Afghanistan, Tajikistan and Kyrgyztan have agreed to form a working group for materialising transmission of 1000 MW electricity from Tajikistan to Pakistan through private sector, but Water and Power Minister Liaquat Ali Jatoi said that security of 900 km transmission line in Afghanistan was a valid concern.

The two-day Central Asia and South Asia electricity trade conference, which concluded on Tuesday, was closely monitored by US State Department, USAID and United States Energy Association (USEA).

The conference was also attended by delegates from Asian Development Bank, World Bank, Islamic Development Bank, International Finance Corporation, Japan Bank for International Co-operation and the private sector (Rao, UES and AES).

The transmission line should be routed through Pul-e-Khumri (Jalalabad) via Kabul to Pakistan. An official statement, which was changed several times on the insistence of the donors and participating countries, said that the conference deliberated upon the demand-supply situation, infrastructure needed for transmission of electricity from Central Asian to South Asian states, commercial arrangements, elements of electricity pricing, financing structure, possible risks and risk management.

The first phase of the trade pertains to 1000 MW power import from Tajikistan to Pakistan through Afghanistan and develop the necessary physical infrastructure, such as the transmission line, institutional and legal framework in the shortest possible time, the statement said.

It was also agreed that surplus power, from Kyrgyz Republic could also be transmitted through this transmission line by suitable interconnections. However, this proposal could not be finalised.

For this purpose, the working group, comprising Shabbir Chaudhary, CEO, NTDC (Pakistan), Sulimonov Akram Rahimovich, Deputy Minister of Energy and Saidov Siroziddin, Deputy Chairman of Barki, Tajik (Tajikistan), Engineer Ghulam Rabani, Advisor Ministry of Energy and Water, Afghanistan, Ilias Dadarov, Head of National Grid Company, Kyrgyz Republic was formed.

According to the statement, IFIs will provide support to hire a consultant with suitable experience of handling such energy trade projects to help identify the required studies, (technical, financial, social, environment, legal, etc.

The IFIs will also prepare draft 'Terms of Reference' (ToRs) for different feasibility studies, recommend institutional structure, and propose an action plan.

The World Bank has been nominated by IFIs as focal institution, whereas the IFIs would finance the expert consultant who would be hired by June 15, 2006.

"The offer of USAID/SARI and US State Department to support cross-border energy trade initiatives was greatly acknowledged and it was agreed that it would be phased in and co-ordinated with the working group," the statement said.

At the conclusion of the conference, Jatoi did not give the timeframe for the completion of the project, but said that the project would be completed as early as possible.

He said that the donors and private sector discussed the project from every aspect, including security of transmission line, and added that it was feasible only after Afghan government gave concrete assurance pertaining to the security of the transmission line.

 

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ISLAMABAD (May 10 2006): Pakistan would seek supply of oil from Kuwait at "subsidised" rates during the upcoming three-day visit of the Kuwaiti Amir Sheikh Sabah Al-Ahmed Al Jaber Al-Sabah, beginning from May 19.

Kuwait and three other oil-rich Gulf states - Saudi Arabia, UAE and Qatar had assured oil subsidies following the October 8 earthquake in Pakistan, private TV News channel reported.

Pakistan's total crude oil requirement is about 240,000 barrels per day. Of this, around 177,000 barrels are imported and the rest is produced locally. Saudi Arabia is the major oil supplier to Pakistan, with about 110,000 barrels of crude oil supply per day, while Dubai and Qatar export 60,000 barrels.

 

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ISLAMABAD (May 10 2006): Pakistan will rely on the mounting foreign direct investment (FDI) and privatisation proceeds to settle the soaring current account deficit, expected to touch $7 billion by the end of the current fiscal year, and avoid buying dollars from the open market to control further devaluation of the rupee.

Besides, the government will also use $800 million raised from the Eurobond it floated in the international capital market and several World Bank (WB) and Asian Development Bank (ADB) disbursement for this purpose, Finance Ministry sources said on Tuesday.

At the Public Accounts Committee (PAC) meeting here on Tuesday, the Ministry admitted that the surging current account deficit was emerging as a nightmare for the country's economy. But a top official of the Ministry claimed that it had sufficient resources to settle the deficit and "there is nothing serious to be worried about".

"We are very comfortable with the cash flow...I don't see any reason for buying dollars from the open market (to bridge current account deficit)," Finance Ministry Secretary Tanveer Ali Agha told the PAC.

He said that FDI, privatisation proceeds and $800 million Pakistan had recently raised from Eurobond it floated in the world capital market would be utilised for bridging this gap.

He, however, did not mention whether these components-FDI, privatisation receipts and other resources-would be enough to bridge such a huge gap.

And, another question to be asked here was that whether the government could use privatisation proceeds for any purpose other than external debt retirement and poverty reduction.

Agha was responding to a member's query who asked as to how the government was planning to settle the surging current account deficit expected to go beyond $7 billion record level this fiscal.

Experts believe the government will have to do some thing 'out of the box' to bridge the gap if it wants to save the economy from external pressure and arrest currency devaluation.

Pakistan People's Party Parliamentarians (PPPP) MNA Qurban Ali Shah said: "What will happen (to the currency) if the government has to buy dollars (from the open market)?" The question put Agha in a bit of bother.

But the Finance Ministry Secretary was quick to reject the reservation, and replied: "There is absolutely no need of buying dollars."

TRADE DEFICIT: About trade deficit that is also climbing at a wild pace and is expected to go beyond imagination this year, Agha was optimistic that it was due to transition from an agrarian to industrial base the country's economy had undergone recently.The major component responsible for such a rapid rise in the trade deficit, Agha said, was high international oil prices that had forced Pakistan to pay $7 billion, instead of anticipated $3 billion.

And second largest chunk was the import of the machinery, followed by raw material, that the Secretary hoped would in turn gear up the development and generate employment. He added that only a small element in Pakistan's import was of consumer goods and it was nothing anyone should bother about.

MLY PENSIONS OUT OF CIVILIAN BUDGET: The Secretary Finance told the meeting that pensions to retired military officials were being paid out of the civilian budget since 2001-02.

Agha said Rs 28 billion, that was paid as military officials' pensions in 2001-02, had risen to Rs 35.6 billion this year.

He, however, rebutted a report that the Defence Ministry had asked for an additional Rs 61 billion against its budgetary allocations of Rs 324 billion for this fiscal year.

 

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ISLAMABAD (May 10 2006): The government intends to allocate Rs 319 billion in the medium term development framework (MTDF) in the next fiscal year (2006-07), with major focus on social sector and infrastructure development.

According to official sources, the government has launched a number of projects for the welfare of people and improve their living conditions. The government, they said, was focusing on education, health and social sector development and would increase allocations under MTDF in the next financial year.

The sources added that the government had also launched various development projects in water, road, ports and airports sectors. They added that these projects would help achieve higher economic growth and create more employment opportunities for the people.

"We are nearer to seven percent gross domestic product (GDP) growth during the current financial year", they added. On water sector, they added that the Mangla raising project, launched at a cost of Rs 62 billion, would be completed by September 2007 and under the project, the level of the dam would be raised to 30 feet.

Karachi Water Supply Project (K-3), launched at a cost of rupees six billion, would be completed and operational by the end of this month, they added.

They said that lining of over 85,000 water courses at a cost of more than Rs 60 billion would benefit a larger number of farmers and help enhance agriculture productivity and increase the GDP growth.

The sources added that the government had decided to invest more on the road infrastructure and allocated Rs 24 billion for road projects and so far Rs 18 billion had been spent on the projects.

They further said that the government would ensure that Gwadar was linked with other parts of the country. The railways container yard would be completed by June 2007, they added.

About the priority projects, they said that Lyari Express Way, Karachi Northern Bye-pass, Makran costal Highway, Gwadar-Khuzdar Noumoredaro road, Lowari tunnel, greater water supply scheme, Mirani dam, greater Thal canal, Kachhi canal, and Diamer-Basha dam were some of the priority projects. The work on Lowari tunnel had started and the project would be completed by 2008.

Under the greater water scheme at a cost of rupees eight billion clean drinking water would be provided to people across the country in two years. The utilisation of PSDP allocations until December 2005 stood at Rs 76.178 billion (37.3 percent), which shows improvement in the implementation of development portfolio.

The size of the Federal PSDP, which used be around Rs 90 billion to Rs 100 billion only a few years back, had taken a massive jump during the last three years with Rs 204 billion allocated under the PSDP in 2005-06 financial year.

They said the PSDP-GDP ratio had increased from the previous 2.5 percent - 2.6 percent to current 3.8 percent, as the availability of funds improved owing to better revenue position and the economic momentum, which indicated that the economy was moving in the right direction. The utilisation of PSDP allocations during the last two fiscal years, ie 2003-04 and 2004-05, was 100 percent, they added. An amount of rupees five billion Khushhal Pakistan Fund, aimed at focussing on less developed areas, would be taken to the level of one billion-dollar fund, in which the DFID-UK and the World Bank are expected to contribute significantly.

 

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ISLAMABAD (May 10 2006): The government is targeting 1 billion dollar pharmaceutical exports for next fiscal, which would be 15 times more against 61 million dollar of current fiscal year. Pakistan is currently exporting 61 million dollar pharmaceutical products that were only 39 million dollar in 2004-05.

"We are setting a target of 1 billion dollar for our pharmaceutical exports in upcoming fiscal and we hope we achieve it," Federal Health Minister, Muhammad Nasir Khan told a news conference here at the Ministry of Health.

He was flanked by secretary health, Syed Anwer Mehmood, Balochistan Health Minister, Hafiz Hamdullah and other senior officials of the ministry.

Briefing about the 'ambitious' target, the minister said country's pharmaceutical exports were zero few years back but the government with its 'commitment' has increased it from 39 million dollars last year to 61 million dollars this fiscal.

However, Nasir Khan did not explain how the government could meet this gigantic task in one year.

He said the government would soon put before the National Assembly three draft bills for legislation, one regarding control over the use of traditional medicines that will help in increasing country's pharmaceutical exports.

Briefing about the countrywide polio campaign, Nasir Khan said the government has kicked off three-day immunisation campaign from May 9 to target 16.5 million children that he hoped would make Pakistan a polio-free country this year.

As compared to last year in which 28 polio cases were reported, Khan said only two cases have so far been reported in 2006, one in Killa Abdullah (Balochistan) and the other in Dera Ismail Khan.

He said the campaign would be conducted in 49 districts, focusing on high risk districts where the chances of disease are greater. Nearly 60,033 polio teams will go door to door in the campaign to vaccinate children under the age of five year. The minister said the immunisation campaign would be launched in tribal areas as well and added they had no difficulty in conducting vaccination campaign in troubled areas.

Adding to Khan's remarks, the provincial minister said Balochistan was a polio-free area and religious leaders are on board with the government. "No matter if children have fever or diarrhea, they need to be given these polio drops during every round," Khan stressed and assured there was no risk of over dosing.

The minister categorically ruled out transmission of bird flu virus into humans. He said blood samples of 109 persons with apparent symptoms of avian influenza were collected and all of them have been found clear of pandemic. Khan said there was no official directive not to serve chicken dishes either in Presidency or Prime Minister Secretariat.