Pakistan Economy - News & Updates - Archive

[Neo]

Commercial production from Thar Coal mines by 2012

ISLAMABAD (August 26 2007): The Petroleum Ministry is all set to start commercial production of Thar Coal mines by 2012 under a roadmap approved by President Pervez Musharraf, a senior official of the ministry said.

"Commercial production from Thar Coal mines will be started in 2012 that would greatly help enhance the coal share in overall energy mix in the country," Director General, Mineral, Irshad Ali Khokhar said on Saturday.

Under the roadmap advanced hydrological studies would be undertaken before test-pit digging to make foreign investors realise that besides 120 meters deep sand bed the commercial production of coal was possible in Thar.

He said that generation of power from furnace oil would be too expensive for industry and domestic use, so the government had planned to develop indigenous coal resources for energy security of country. The Energy Security Action Plan elucidated the target of 20,000 MW electricity from coal by 2019.

The Sindh government being major shareholder of coal resources is endeavouring to attract international investment for development of Thar Coal resources in consultation with PPIB. The Director General said Pakistan imports its primary energy requirements incurring an expenditure of about dollar Rs 4 billion dollar annually.

He said the natural gas contributing 50.3 per cent and oil 29.4 per cent in overall energy mix, at present has some how mitigated high import bill, whereas coal contribution is 7.6 per cent only.

Furthermore, with present growth rate of 7 per cent the country would require additional power of 10,000 MW by 2010, due to long gestation period coupled with high financial costs, he said.

Total estimated coal resources of Pakistan are about 185 billion tonnes, which mainly include resources of 175 billion tonnes at Thar in Sindh. Owing to large coal potential, Thar Coal could be developed as large source of energy. The Thar Coal reserves are the fifth largest in the world and would reach maximum production capacity by the end of 2020.

Based on available infrastructure and favourable geological parameters, the Geological Survey of Pakistan (GSP) evaluated the resources over an area of 352 sq km.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Saturday, August 25, 2007

CDWP likely to approve 44 projects worth Rs 86.024b​

ISLAMABAD: The Central Development Working Party (CWDP) is likely to recommend and take up 44 developmental projects worth Rs 86.024 billion in 11 sectors at its meeting scheduled to be held on Monday (Aug 27).

The 44 projects expected to be recommended have a foreign exchange component of Rs 25.4846 billion. Five projects in the transport and communication sector are: Rehabilitation, improvement and widening of existing road of N-55 Chashma Right Bank Canal crossing to Sara Gambilla worth Rs1.5845 billion; Fourth Highway Project (Revised) Construction of 507.53 km of additional carriageway and provision of 153 km of overlay on the National Highway N-5 worth Rs 7.979 billion; construction of Malakand Tunnel worth Rs 8.0883 billion. The sponsoring agency of all the above three projects is the Communication Division.

Construction of an underpass in Bahawalpur City near railways station to link two parts of the City is valued at Rs 34.035 million. The last and fifth project is Sheikh Rasheed Expressway and Flood Channel Project worth Rs 17.769 billion. The government of Punjab is the sponsoring agency for the last two projects. Federal Government Data Center and Internet worth Rs450.848 million is the only project in the information technology division and IT and Telecom division is the sponsoring agency for the project.

Six projects of the energy sector are: Electrification of new township at Tali Mat District Dera Bugti worth Rs 71.660 million, Electrification of villages in District Dera Bugti worth Rs 717.710 million. The sponsoring agency for the above two projects is the government of Balochistan. Third project is the addition of four 500 and 220 KV sub-stations and Associated Transmission Lines in NTDC Integrated System worth Rs 12.894 billion. Fourth project is 220 KV Rohri substations and associated transmission line for dispersal of power from IPPs of Fauji Foundation and Engro near Daharki worth Rs 4.765 billion. The fifth project is 220 KV D/C T/L from Chashma to Luderwala for interconnection of Chashnupp-2 worth Rs 2.025 billion. The last project of energy sector is Engineering Design Organisation of the Pakistan Atomic Energy Commission worth Rs 424.3 million.

The Water sector consist of three projects, which are, Assuring water supply for Karachi by upgrading Kinjhar lake system worth Rs 3.422 billion, re-settlement action plan for Mirani Dam project worth Rs 1.243 billion and the third project is construction of Aujo Escape worth Rs 94.770 million.

The education sector has three projects that include establishment of govt polytechnic institute for boys at Muslim Bagh District Qilla Saifullah worth Rs 208.66 million, establishment of govt polytechnic institute for boys at Khanozai District Pishin worth Rs 221.594 million and the third one is the establishment of National Education Assessment System worth Rs 340.385 million.

The CDWP will take up four developmental projects of the physical planning and housing sector, which are; Uplift of Ziarat Town, Balochistan worth Rs 300 million, Augmentation of Pasni Town water supply system procurement Rs 593.517 million, Project for the retrieval of sewerage and drainage system in Lahore City (Phase-II) worth Rs 588.73 million. The last project of this sector is the extension of ENERCON Building, Sector G-5/2 Islamabad worth Rs 147.510 million.

Two projects of the culture, sports and tourism sectors that are expected to be given approval are; Establishment of Pak-China Friendship Center at Islamabad worth Rs 3.128 billion, and the Construction of Boxing Gymnasium at Islamabad worth Rs 62.019 million.

Agriculture and Food sector has the following five projects; The white revolution worth Rs 2.654 billion, Promotion of Cotton Cultivation in Balochistan (Phase-II) worth Rs 202.787 million, Oil Palm Cultivation in Coastal Areas of Balochistan worth Rs 466.251 million, Development of Olive Production and Processing in Balochistan worth Rs 185.843 million, and the Development of Fisheries Training Center at Gwadar worth Rs 361.154 million.

Health sector has the following five developmental projects; Construction of 50-bed Hospital at Pasni in Gwader District worth Rs 151.208 million, Establishment of Swat Institute of Nuclear Medicine and Radiotherapy worth Rs 795.51 million, Bannu Institute of Nuclear Medicine and Radiotherapy worth Rs 796.53 million, Establishment of DI Khan Institute of Nuclear Medicine worth Rs 692.69 million and Nawabshah Institute of Nuclear Medicine and Radiotherapy worth Rs 862.69 million.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

165 megawatts plant agreement signed ​

ISLAMABAD (August 25 2007): The Implementation Agreement for 165 MW Attock General Limited (AGL) power project was signed on Friday here at Private Power and Infrastructure Board (PPIB). Adil Khattak, CEO of AGL, signed the agreement on behalf of the company, while on behalf of the Government the agreement was signed by PPIB Managing Director Muhammad Yousuf Memon.

The power plant will be located at Morgah, near Rawalpindi, and will use indigenous low sulphur fuel oil (LSFO). The plant will apply combined cycle technology, according to a press release.

The sponsors of the project are Attock Refinery Ltd and Attock Oil Company, UK, and the plant will be set up at a cost of $113 million. It is expected that the plant will start supplying power to the national grid by August 2008.-PR

Business Recorder [Pakistan's First Financial Daily]

 

[Contrarian]

Neo, why was the Indian economy section closed?

 

[Neo]

Neo, why was the Indian economy section closed?

I have no clue mate, I've reopened the thread.

 

[Neo]

38 projects worth Rs 72.1 billion approved ​

ISLAMABAD (August 28 2007): The Central Development Working Party (CDWP) on Monday approved 38 projects worth Rs 72.1 billion with foreign exchange component of Rs 17.1 billion. Briefing the newsmen, Planning Commission spokesman Asif Sheikh said that the cost of 21 projects each was over Rs 500 million.

Hence these projects were referred to the Executive Committee of National Economic Council (Ecnec), which is expected to meet and take these up before the month of Ramazan. These 21 projects, costing 55 percent of total development schemes are worth Rs 68.2 billion.

About foreign exchange component, he said it had been conscious policy of the government that this aid should only be taken for infrastructure development projects, and 70 percent cost from Rs 12 billion power projects would be utilised from foreign exchange component.

He said that till September only those projects would be approved for which the allocation has been made in the Public Sector Development Plan (PSDP). He said that 24 projects, approved or recommended by the second meeting of the current fiscal year, had the PSDP allocation. The CDWP revised as many as 28 projects and their cost has gone up from Rs 13 billion to Rs 23 billion.

Giving break-up, he said that 15 projects, of Rs 50.8 billion, are for infrastructure, 19 projects of Rs 18 billion for social sector, and 4 projects of Rs 3.9 billion for other sectors including agriculture.

Transport and communications projects include Rehabilitation, improvement and widening of existing road of N-55 Chashma Right Bank Canal crossing to Sara Gambilla worth Rs 1.5845 billion, 4th Highway Project (Revised) construction of 507.53 km of additional carriageway and provision of 153-km of overlay on the National Highway N-5 worth Rs 7.979 billion and Sheikh Rashid Expressway and Flood Channel project (Leh Nullah Expressway) Rawalpindi of Rs 17.76 billion

Energy sector projects include electrification of new township at Tali Mat District Dera Bugti worth Rs 71.660 million, electrification of villages in District Dera Bugti worth Rs 717.710 million, addition of four 500 kv and 220 KV substations and Associated Transmission Lines in NTDC Integrated System worth Rs 12.894 billion, 220 KV Rohri substations and associated foundation and Engro near Daharki worth Rs 4.765 billion and another 220 KV D/C T/L from Chashma to Luderwala for interconnection of Chashnupp-2 worth Rs 2.025 billion.

The developmental projects of the physical planning and housing sector include uplift of Ziarat Town, Balochistan worth Rs 300 million, augmentation of Pasni Town water supply system procurement Rs 593.517 million, project for the retrieval of sewerage and drainage system in Lahore City (Phase-II) worth Rs 588.73 million and extension of ENERCON Building, Sector G-5/2 Islamabad with Rs 147.510 million.

Health sector projects are: construction of 50-bed hospital at Pasni in Gwader District worth Rs 151.208 million, establishment of Swat Institute of Nuclear Medicine and Radiotherapy worth Rs 795.51 million, Bannu Institute of Nuclear Medicine and Radiotherapy worth Rs 796.53 million, establishment of DI Khan Institute of Nuclear Medicine worth Rs 692.69 million and Nawab Shah Institute of Nuclear Medicine and Radiotherapy worth Rs 862.69 million.

Water resources projects include Resettlement Action Plan (RAP) for Mirani Dam project of Rs 1.24 billion and construction of lower Nara Canal Nip side modified PC-1 of Rs 94.770 million. The CDWP also approve establishment of National Education Assessment System (NEAS) revised 2002-08 with a cost of Rs 340.385 million.

Two projects of the culture, sports and tourism sectors that were taken up by the CDWP are establishment of Pak-China Friendship Centre at Islamabad worth Rs 3.128 billion, and the construction of Boxing Gymnasium at Islamabad worth Rs 62.019 million.

Agriculture sector projects include white revolution worth Rs 2.654 billion, promotion of Cotton Cultivation in Balochistan (Phase-II) worth Rs 202.787 million, development of Olive Production and Processing in Balochistan worth Rs 185.843 million, and the development of Fisheries Training Centre at Gwadar worth Rs 361.154 million.

A project of Information Technology namely Data Centre and Internet worth Rs 493.810 million and two projects of Science and Technology, Establishment of National institute of Laser and Optronics (NILOP) at Islamabad and Funding for ICT-Pakistan collaboration, was approved by the meeting.

Higher Education Commission projects approved by the CDWP are, a sub campus of Agriculture University at Depalpur, Okara, with Rs 475.395 million, Rs 1.375 billion for land acquisition for Engineering, Science & Technology University at Islamabad, Rs 47.550 million for G.C. University at Faisalabad on cost sharing basis with Punjab government, Rs 981 million scholarships for Students of Balochistan and FATA, Rs 2.270 million for NUST headquarters and H9-Tech Postgraduate Science and Technology Institutes at Islamabad-Phase-1 (Revised), Rs 3.722 billion for Information Technology & Management Science and Telecommunication Institutes at Islamabad-Phase-1 (Revised) and Rs 465 million for development on farm Students Research Facilities, Gujar Khan, University Arid Agriculture, Rawalpindi.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Major entities' sell-off may be left to next government ​

ISLAMABAD (August 27 2007): The government is likely to leave the privatisation of major public sector entities for the next government and would only proceed for Global Depository Receipts (GDRs) and Initial Public Offerings (IPOs), official sources told Business Recorder.

The Privatisation Commission (PC) realised Rs 86 billion in 2006-07 against the budgeted target of Rs 75 billion, and similar target had been fixed for the current fiscal year, which appears to be unachievable.

Sources said: "The next government will take decisions on all major transactions, and we will proceed only for GDRs and IPOs already planned by the present administration."

Analysts are also of the view that it is not the right time to go for privatisation of more entities, as investors have adopted the policy of 'wait and see'.

They said that the privatisation process had already been dead after the annulment of Pakistan Steel Mills (PSM) deal by the Supreme Court, and the privatisation process of Pakistan State Oil (PSO) has also been halted as the Attock Group has challenged its disqualification from the list of bidders.

With sudden change of Privatisation Minister and post of Secretary Privatisation being vacant, chances of IPOs and GDRs were also looking bleak, said another official.

He was of the view that after the demise of two federal secretaries--one in the Prime Minister House, and the other in an accident in Saudi Arabia--no Secretary is ready to join the Privatisation Ministry.

According to official sources, the planned privatisation of SME Bank, National Investment Trust, State Life Insurance Corporation (IPO), Pakistan Petroleum Limited (PPL), National Power Construction Company (NPCC), Hazara Phosphate Fertilisers Limited, Services International Hotel, Roosevelt Hotel New York, Jamshoro Power Company Limited (JPC), Republic Motors Limited Lahore, Pakistan Tourism Development Corporation (PTDC) Motels and Hotels, Heavy Electrical Complex, Pakistan Steel Mills IPO, Lakhra Coal Miners, Faisalabad Electric Supply Company(Fesco) and Pakistan Mineral Development Corporation salt and coal mines would be left for the next government.

They said that privatisation of Heavy Mechanical Complex (HMC) was shelved only to appease one of the Federal Ministers who hails from Taxila.

According to the PC's earlier presentation to the Cabinet Committee on Privatisation (CCoP), GDR for the Habib Bank Limited (HBL) had been planned for September 2007, while invitation of SoIs, pre-qualification, bidders due diligence, pre-bid conference and bidding of SME Bank had to be held during the first quarter of 2007-08, which would be missed.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

'Country needs shipyards with bigger docks' ​

ISLAMABAD (August 28 2007): President General Pervez Musharraf on Monday said ship building industry can become the country's great asset due to its potential and would contribute to the uplift of national economy. The President was chairing a meeting of the Karachi Shipyard and Engineering Works (KS&EW) to review the ship building industry, which was also attended by Prime Minister Shaukat Aziz.

KS&EW Managing Director Vice Admiral Iftikhar Rao, in his presentation, informed the President Musharraf that ship building is an attractive industry for developing nations, because shipyards are labour-intensive and employ a large number of workers, including a wide range of ancillary industry.

The participants of the meeting were briefed that since 2003, the number of orders had been doubled, ie from 115.5 dwt to 300 dwt and the total anticipated receipts were Rs 965 million. The next 50 years will see a growing demand for new ships which would increase from 30 million dwt a year now to around 90 million dwt a year in 2055. It was also pointed out that the commercially strategic location of Pakistan was a takeoff point for such projects.

President Musharraf remarked that Pakistan should concentrate not only on ship repair but also ship building and needed shipyards with bigger docks to accommodate larger vessels.

He approved the concept and formation of a steering committee for implementation of the project. Among others, Balochistan Governor Owais Ahmed Ghani, Defence Minister Major Habibullah Warraich (Retd), Planning Commission Deputy Chairman Muhammad Akram Sheikh, and PM's Adviser on finance Dr Salman Shah attended the meeting.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Services sector deficit widens to $536 million in July ​

KARACHI (August 28 2007): The country's services trade deficit widened to $536 million during July 2007, up by $6.463 million, mainly due to high payments on account of transportation, travel, financial, computers services and royalties.

SBP statistics on Monday showed that Pakistan earned $218.822 million, against payments of $755.390 million, on the account of services trade during first month of current fiscal year. This deficit was $6.163 million higher than $530.105 million of July 2006.

During the period under review, transportation exports amounted to $95.928 million, against the imports of $283.045 million, depicting a deficit of $187.117. Travel exports stood at 12.89 million against imports of $113 million. Insurance service exports amounted to $2.655 million against imports of $21.788 million, while financial services payments stood at $6.046 million against the receipts of $3.418 million.

The country earned $2.010 million on the account of royalties and licence fees against payments of $115.058 million and in other business services, exports stood at $45.695 million against imports of $258.526 million during July 2007.

Some sectors including communication and construction performed well, as these sectors' exports are the higher than imports. Communication sector exports stood at $6.785 million against imports of $5.439 million, construction sectors earned $6.785 million against expenses of $1.082 million.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Cotton crop and the textile industry​

Pakistan may miss the cotton production target of 14.20 million bales for this year because of the pest attack, which is reported by growers to have affected the crop on at least 25 per cent of the total area of eight million acres under cultivation, ahead of the start of full-blown harvest.

“The crop is under attack of Cotton Leaf Curl Virus (CLCV) and mealy bug at various places in Punjab,” the AgriForum Pakistan says.

“The agriculture department officials from nine districts in the province have corroborated the reports of mealy bug attack on the crop,” AgriForum chairman Ibrahim Mughal tells Dawn. But, he says, it is too early to predict the extent of damage to cotton crop, the mainstay of Pakistan’s economy.

“The extent of damage being caused by the pest to the pick varies from one place to another,” he says. “The key point to note is that the government, especially its plant protection department and ministry of food, agriculture & livestock, has done little to ensure provision of insecticides needed to kill mealy bug despite repeated warnings from the growers about the appearance of the pest since the beginning of this month,” he says.

The insecticide required to combat mealy bug, the farmers claim, is available in some areas for Rs1,300 per litre against its actual rate of Rs600 a litre because of its acute shortage in the market.

“The current situation reminds one of similar mealy bug attack last year, which largely contributed to the country missing the cotton output target by a hefty 800,000 bales,” says Mughal. “Government failed to act on time even last year and the growers either paid a very high price to purchase insecticides to eliminate the pest or could not get it at all and suffered huge losses.”

Mealy bug was spotted on the cotton crop for the first time in 2005, but it did not cause much damage to the crop that year. None of the research institutes in Pakistan could identify the pest or suggest measures for its elimination. The insect was sent to England for identification.

The growers say even B.T. cotton is not resistant to mealy bug, which is considered by the farmers to be a major threat to cotton crop because it comes in 3-4 layers. The insect lays eggs and hatches them in a natural basket attached to its body. It multiplies rapidly as eggs are hatched in 6-10 hours. Its occurrence not only curtails the crop size, but also increases the production cost as the farmers are required to apply 3-4 sprays of insecticides to kill it and control the damage.

While the growers are trying to underline the threat of mealy bug to the cotton output, the textile industry is making efforts to downplay the farmers’ claims. The reason is pretty obvious: The reports of reduced crop size can trigger panic buying by the mills and shoot the commodity’s rate to new levels as was witnessed on August 10 when the lint prices surged to the historical level of Rs3,500 a maund (37.32kg) on fears of its tight supply owing to heavy rains in Sindh.

“Mealy bug or other pests should not have affected more than 1- 2 per cent of the total area under cotton cultivation,” says a spinner, who refused to give his name. He like many other spinners, is pretty confident that the country will be able to reap a good crop and attain the output target for this year. But he also warns the government to take effective measures to control the damage to the crop by the pest attack.

Unnerved by the unexpected surge in the cotton prices, the All Pakistan Textile Mills Association (Aptma) advised spinners struggling under increasing costs of production to take advantage of the provision in the labour laws to temporarily lay off labour for 14 days for reducing their cotton consumption to narrow the gap between demand and supply of the commodity.

At the same time, the yarn spinners also arranged for the import of around 2,000 tonnes of Uzbek cotton warehoused at the port of Bandar Abbas, Iran, at about Rs3,000 a maund. Some 8,000 bales are already said to have reached Pakistan during the last few days.

Nevertheless, the reports of imported cotton landing Pakistan have failed to contain the fluctuations in the cotton market. Although the lint rates eased to Rs2,900 per maund early last week, the price again jumped to Rs3,350 per maund in the second half of the week before sliding to Rs3,125 (Punjab) and 3,025 (Sindh).

“Rains in Sindh and tight supply from early pick are causing the cotton prices to fluctuate in the domestic market. If we examine the cotton price outlook for the next harvest on the basis of the global scenario, we are hoping to see its rates to come down sharply,” says a senior Aptma office-bearer.

He pointed out that New York Cotton Futures for Dec have dropped to $0.64 a pound from $0.68. “Commodities are crashing the world over on fears of impending recession in the global economy owing to the crisis spawned in the world markets by the recent crisis in the United States’ sub-prime mortgage market. The big investors and hedge funds are liquidating their assets in the commodity markets to make up for their losses in the stock markets. A bearish trend is visible all around the globe,” he says. “We are looking at New York Cotton Futures for Dec sliding to $0.54-55 a pound sooner than later. How can Pakistan remain unaffected by the global developments? The cotton market in Pakistan too has to cool down.”

Pakistan Cotton Ginning Association (PCGA) chairman Sohail Haral says the supply of the commodity in the domestic market is expected to remain tight till at least Sept 20. “The price fluctuations are caused by rains in Sindh as well as tight supply of the commodity ahead of full-fledged commencement of its harvest in October.” He says on 78 ginning factories out of a total of 1,200 in the country are operating at present due to slow supply of 7,000 to 8,000 bales a day.

He says only early pick of B.T. Cotton, which according to the AgriForum has been sown on 2.4 million acres in non- core cotton areas, is reaching the market at the moment. He also warns the government that if the growers are not provided pesticides needed to control the damage caused by mealy bug, CLCV and other pests, the crop output could be affected adversely.

As the spinners are making hectic efforts to somehow keep down the price of their main raw material, the growers are crying for a better price for their product. “The farmers are getting only Rs1,250 per maund for their crop at this time against their input cost of Rs1,500,” claims Mughal. He says the mealy bug attack has increased the farmers’ costs on account of their huge spending on pesticides, which are short in the market and are available only at more than double the actual price.

The growers also blame the textile industry of manipulating the price, a charge that is denied by Aptma officials. “We have nothing to do with price manipulation. We are the largest consumer of local crop. If the farmers are worried about import of cotton, they should stop fretting on this account because they are also free to export their product. The textile industry needs cheaper raw material to survive. If the domestic cotton market is going up for one reason or the other despite falling commodity prices in the global markets, we shall import as much fibre to meet our needs as possible. We want the farmers to get a good rate for their product. But it should not be done at the expense of the industry,” says a former Punjab Aptma office-bearer.

He also demands that government must allow import of all varieties of Indian cotton via Wagha in order to ease the domestic prices. “We need to create a balance to safeguard the interests of both the industry and the farmers. That is in the best interest of the country and its efforts to increase exports as well as its people. Anything contrary to this will take us nowhere,” he warns.

Cotton crop and the textile industry -DAWN - Business; August 27, 2007

 

[Neo]

Declining manufacturing growth​

By Mohiuddin Aazim

In the last fiscal year, the production of large-scale manufacturing grew 8.4 against 10.7 per cent a year ago—and far below the target of 13 per cent. This year, the growth target is 12.5 per cent but industrialists say it is too ambitious.

The growth in LSM peaked at 15.6 per cent in FY05 before it fell to 10.7 in FY06 and to 8.4 per cent in FY07. So, whereas a lower growth in FY06 can be attributed, at least partially, to a high-base effect, a further slump in it in FY07 was a real slippage.

Businessmen cite rising interest rates, declining demand, increased labour cost, erratic supply of electricity, high utility prices and poor infrastructure as key factors that might depress LSM growth in FY08. They fear that an anticipated fall in cotton output after the floods, worsening law and order situation and political uncertainty ahead of elections may also dampen LSM production.

“There seems to be little or no basis for being so much optimistic about LSM growth,” says Mr Mushtaq A. Vohra, ex-chairman of All Pakistan Textile Mills Association. He sees growth in textiles stagnating for many reasons including those listed above.

Mr Vohra laments that the government has ignored the textile sector while India, China and Bangladesh are providing many incentives. This, he fears, coupled with the lack of large-scale investment financing would dampen LSM growth. In the last fiscal year, the production of cotton yarn grew about 12 per cent but the production of cotton cloth rose just seven per cent.

Textile mill owners say this year production of cotton yarn too might not grow as fast because of inadequate supply of high-grade cotton. And production of cotton cloth and other value-added textile products might show only a nominal growth.

Mr Majyd Aziz, president of Karachi Chamber of Commerce & Industry also believes that meeting the LSM growth target of 12.5 per cent would be too difficult. “Infrastructure bottlenecks, power shortages and a slowdown in demand are key constraints,” he says.

Mr Aziz points out that the large-scale manufacturing is faced with the challenges of low productivity, lack of skilled labour, unreliable power supply and saturation of capacity in most of industries.

He fears that textiles production which accounts for about one –fourth of LSM’s output may post a low growth in FY08 due to rising cost of production and an anticipated decline in cotton output after the floods. Farmers Association of Pakistan reckons that mealy bug and leaf curl virus have so far ravaged 25 per cent of cotton crop.

As for automobiles businessmen opine that high imports of used cars and increase in car-financing rates may lower domestic production of cars and jeeps.

In the last fiscal year the production of cars and jeeps grew at a negligible rate of 0.42 per cent—the lowest in the last five years. The number of cars/jeeps that rolled out in FY07 stood at 163,794 marginally up from 163,114 in FY06. “This was due to capacity constraints, lower demand growth, and increased imports of used vehicles,” said a senior executive at a car manufacturing plant.

Other major industries like sugar, cement, fertilizer, petroleum, cooking oil, paper and board, chemicals and basic metals showed a mixed trend.

In the last fiscal year, sugar production rose more than 19 per cent to 3.52 million tonnes on the back of increased sugar cane production. Its production grew about 23 per cent. Sugar millers say that sugar production is expected to show a decent growth also in this fiscal year as sugar cane production is likely to remain strong. “But this growth in sugar industry is very temporary,” warns Mr Zaka Ashraf, Chairman Punjab Zone, Pakistan Sugar Mills Association.

“Sugar mill owners have long stopped any investment in their plant and machinery and subsidised imports of sugar have forced them to sell sugar at very low prices thus incurring huge loss.”

“After a year or two, you won’t see any decent growth in local sugar production,” he predicts.

In the last fiscal year, paper and board, fertiliser and petroleum industries showed a fall in production mainly due to weakness in demand and temporary shut down for maintenance or expansion.

Cement industry grew 22.5 percent mainly due to enhancement in the installed capacity during the last five years on increased local and international demand. Cement exports increased by 35 per cent to over 2.6 million tonnes.

On the other hand, petroleum production declined by 1.8 per cent. The slowdown was caused mainly by a mismatch in production mix and the demand growth pattern. That was why production of some petroleum products like jet fuel oil, kerosene oil and furnace oil declined but the production of other items like motor spirit and liquefied petroleum gas or LPG went up.

Iron and steel sector showed a very strong growth and the production of all items like steel, pig iron, billets and iron sheets recorded an increase ranging between 5.5-79 per cent.

Higher capacity utilisation and a robust demand for these products on the back of increased construction activity made the steel industry grow in FY07.

Steel dealers say that the production of almost all items of this sector would show a modest growth in this fiscal year mainly because of high base effect. “Besides, after an impressive increase in capacity utilisation by Pakistan Steel in FY07, one should not expect equally promising performance this year,” said a steel dealer who sells Pakistan Steel products. Pakistan Steel is currently utilising 85-90 per cent of its installed capacity. Since large-scale manufacturing accounts for roughly 13 per cent gross domestic product, the LSM growth target is very vital to ensure achievement of the GDP growth target.

This summer all industrial estates in Karachi including SITE and Korangi complained of up to 33 per cent production loss due to frequent and prolonged power outages. In Lahore, Faisalabad and other industrial hubs, the situation was not very different though the percentage of production loss was not as high as in Karachi.

Given the fact that no major improvement has taken place in regard to power supply, this would continue to have a dampening impact on LSM growth during this fiscal year.

As for the rising interest rates, these are the by-product of a tight monetary policy which the SBP is pursuing to contain inflation. In the first month of this fiscal year, CPI inflation stood at 6.4 per cent- against the annual target of 6.5 per cent- chiefly because of a high base effect.The SBP has further tightened its monetary policy stance from August 1.

But in this process , interest rates are sure to rise further. At the end of June, the average lending rate of banks stood at 11.33 per cent, which top bankers say might rise by 0.5-1.0 percentage points during the course of this fiscal year. Executives of large business groups say that instead of complaining of rising interest rates, businesses need to increase their credit worthiness with the banks.

“We still get bank finances at nine per cent,” said head of a large business group. He said that high level of liquidity and growing competition in the banking system would help businesses get loans at cheaper rates—provided they follow best business practices.

Items Growth in

FY07

Kerosene Oil (-5.41%)

High Speed Diesel (-1.97%)

Furnace Oil (-4.72)

LPG 3.70%

Cotton yarn, 11.75%

Cotton cloth 6.75%

Sugar 19.13%

Nitrogenous Fertilizer (-2.03%)

Phosphatic Fertilizer (-10.06%)

Soap and detergents 2.2%

Vegetable ghee 2.26%

Cooking oil 7.04%

Cement 22.49%

Cigarettes 2.87%

Jeeps and cars 0.42%

Tractors 10.46%

Bicycles (-17.51%)

Paper &paper board (-2.21%)

TV Sets (-35.85%)

Motor tyres 18.27%

Steel Products 10.69%

Refrigerators 7.25%

Deep Freezers 4.34

Caustic soda 10.45%

Source: Federal Bureau of Statistics

Declining manufacturing growth -DAWN - Business; August 27, 2007

 

[Neo]

Mushroom growth of CNG stations​

MUSHROOM growth of compressed natural gas (CNG) stations in Peshawar in violation of safety standards and government bye-laws is posing serious threat to precious lives and billions worth investment.

Interviews with operators and officials agencies, which regulate this thriving sector, suggest that frequent increase in oil prices is pushing owners of petrol vehicles to shift to natural gas.

The number of gas stations is increasing fast and ,according to a conservative estimate, the sector has attracted more than Rs62 billion investment country-wise during last nine years in which the share of NWFP is Rs25 billion.

The Oil and Gas Regulatory Authority (OGRA) has issued more than 5,000 provisional licences for setting up CNG stations across the country, of which around 2,000 are operational, while the rest are in the pipeline.

In Peshawar, which has a population of two million people, 68 gas stations provide fuel to more than 15,000 vehicles, whereas more than a dozen stations are under-construction.

The CNG station operators in the province, who are beneficiaries of the boom, are worried about their future in the backdrop of unabated increase in the number of operators.

The fate of CNG sector, they say, would not be different from flour mills industry, if the prevailing pace of setting up of new stations without caring for safety standards and bye-laws continue.

Their worries also led to a protest and strike in Peshawar last week that compelled the owners of 15,000 vehicles to opt for petrol, which increased their financial burden owing to closure of 68 gas-stations.

However, the strike was later called off following the intervention of NWFP Chief Minister Akram Khan Durrani. Mr Ghiyas Paracha, an office-bearer of the association, said that the district Nazim Haji Ghulam Ali had assured the association that a committee would look into the issue and prepare its report within 15 days.

Ikhtiar Wali Khan, president of the All Pakistan CNG Association, NWFP chapter, says that being a cheaper alternative to oil, consumption of CNG is increasing in the city rapidly, but the demand can be catered with the existing number of gas-stations.

He argues: "The OGRA, provincial and district governments have formulated certain guidelines to ensure safety of consumers and operators besides the business interests, which needs to be implemented in letter and in spirit.

But, unfortunately the City District Government, Peshawar, has violated its own bye-laws time and again just for the” vested interests."

The existing bye-laws for the district governments for regulating CNG stations were formulated by the provincial government and were first implemented in Peshawar and later adopted in other parts of the province.

According to the original guidelines, the minimum distance between two gas-stations was determined at 300-meters inside and 1000-meters outside the city. This condition was put in place to ensure safety of the public and also discourage mushroom growth of gas stations.

However, the district government, which issues final No Objection Certificate (NOC) for setting up a station, has deliberately been violating such guidelines particularly those relating to the distance just to oblige some elements, remarks Mr Khan.

The distance for outside the city has now been reduced up to 200-meters which led to appearance of new stations within short distance contrary to safety standards.

Under the guidelines no gas station can be set up near bridges, schools, hospitals, parks or any other public place to avoid any damage to public.

But in a number of cases, the district administration has allowed the setting up of gas stations close to sensitive locations in violation of bye-laws, he says.

These locally-manufactured sub-standard gas cylinders, being installed comparatively at cheaper rates than its certified versions, are a serious threat to consumers’ lives and property of gas-stations, it was stated.

Operators say that at least four explosions have occurred in Peshawar, Mardan and Nowshera during last one year because of sub-standard gas kits. The matter was taken up with the district administration some one-and-half-year back, but to no avail.

However, Nazim of Peshawar, after the protest of the operators, assured the association office-bearers that action would be taken against workshops installing sub-standard CNG kits, Mr Paracha said.

He, however, explained that the bye-laws are made to protect public interest and they could be amended by the district council.

About the distance issue and operations of un-authorised workshops, the Nazim says: "The district administration did not want to create any unrest in the city. However, if the gas station operators have any grievances they can come to me and a strategy can be evolved to deal with it."

The Sui Northern Gas Pipeline Limited (SNGPL) has recently devised a strategy to counter the mushroom growth of CNG stations in urban areas, which according to the operators of Peshawar, will greatly help in obstructing the prevailing trend.

Under the new plan, the SNGPL will restrict provision of new connections to CNG filling stations to six inches and above diameter pipelines. In addition to this, the SNGPL has also set a new distance-limit for installation of stations from random to two kilometres.

Ghiyas Paracha, former president of the association, believes that the new strategy will stop the mushroom growth of gas stations in congested areas in Peshawar, where mostly four-inch diameter pipeline is used for gas supply.

This small diameter pipe suits pipe network in relatively smaller localities linked through branch roads. Whereas, the large diameter pipelines are laid on major roads within the city and on the inter-city highways.

According to SNGPL estimates, connections will be provided to CNG stations from six, eight, 10, 12, to 16 inches diameter pipelines that have approximate length of more than 5000km across Punjab and the NWFP.

"If implemented in letter and in spirit, public utility will give connections to gas stations to be installed on major roads rather than narrow streets," Mr Paracha maintains.

Mushroom growth of CNG stations -DAWN - Business; August 27, 2007

 

[Neo]

An emerging trade conduit​

By Sabihuddin Ghausi

For long, Sri Lanka has remained a micro dot on the radar screen of Pakistani business. But with the fast changing global and regional environment, an increasing number of businessmen have started eying Sri Lanka as a purchase centre and also as a marketing destination.

They are seen in Colombo with a shopping list and exploring avenues for selling their products.

Trade figures are still not very impressive but what is noteworthy is the pace of improvement. The two-way volume has increased from $110.65 million in 2000-01 to $230 million in 2005-06 and has been estimated at around $149 million in first seven months of the last fiscal year. The two-way trade in 2003-04 swelled to $146.25 million from $114.36 million in 02-03, motivated by the signing of a Free Trade Agreement (FTA). The FTA came into effect in June 2005, and no wonder the two-way trade volume touched the peak of $230 million in 2005-06.

Encouraged by the pace of trade growth in about last two years, the inter-governmental FTA Review Committee of Sri Lanka and Pakistan proposed in March this year, to raise the volume of two-way trade to $1 billion annually in the next few years. ``Next few years mean by 2011 or 2012'', explained Sidhant Kumar, the Sri Lankan Trade Commissioner in Karachi.

“The Sri Lankan business community generally views the FTA with Pakistan more advantageous to them than their FTA with India'', Muhemmed Aejaz, Pakistan's Trade Counsellor in Colombo told this correspondent. As he sees it, the Sri Lankan businessmen are now beginning to consider Pakistan as an attractive market.

Sri Lanka signed an FTA with India in 2000 and with Pakistan in 2002 and many do not rule out of the island becoming a ``trade junction'' or ``trade conduit'' for exchange of goods among the regional countries -- India and Pakistan, Nepal, Bangladesh, Bhutan and Maldives.

Given the geographical location, (a high literacy rate, (more than 92 per cent with highest ratio of English-knowing population in South Asia), a strong adherence to democratic values and a secular outlook and endowed with a modern corporate culture, Sri Lanka is being considered as the destination of businessmen of South Asia.

After the FTA, Sri Lankan trade with India has reached $2 billion. The balance of trade is heavily in favour of India. But in a much modest two-way trade at $230 million, the share of Sri Lankan exports to Pakistan has shown a big jump-- from $44.86 million in 2004-05 to more than $71million in 2005-06

“The volume of the two-way trade between Pakistan and Sri Lanka would have considerably increased this year had there been no shipping crisis as is being witnessed now in Far East and East Asia'', says Raees Ashraf Tar Mohammad, leader of the Pakistan's Commodity Importers' Association. According to him, China announced termination of subsidy on chemicals and dyes by July 2007 under the growing world pressure. Almost the bulk of world shipping fleet diverted to Chinese ports to avail the subsidy for more than a month now, the shipping availability for other ports is still a problem. Explaining the gravity of problem, he said average freight between Sri Lankan and Pakistan was $80 a ton which peaked to $200 in recent times.

Raees led a five--member delegation to Colombo in the third week of August for concluding a deal with a Sri Lankan firm on supplies of spices and variety of kitchen items to meet growing demands during Ramzan and Eid and also for Christmas. The FTA has removed duty on import of black pepper and reduced considerably the rate of duties on many other items. ``We have placed orders for double the quantity of items this time than in the past'', he said. A rough estimate put the entire import orders between $35-- 40 million.

Sri Lankans are buying from Pakistan yarn and fabric in bigger quantities to which they add value for onward export to the USA and Europe. Like Pakistan, Sri Lankan depends a lot on USA and Europe for export of textiles. Reports also suggest that a few Pakistanis have made modest investment in Sri Lanka's garment industry.

The foreign secretaries of the two countries at a meeting in Islamabad reviewed the bilateral relationship in February with reference to military hardware sale to Sri Lanka. Pakistan is helping Sri Lanka in its endeavour to counter terrorism.

The first inter-governmental committee also explored the possibilities of including services sector in the FTA. The meeting noted Pakistan's achievements in banking, financial services, insurance, engineering, construction, road development and communications. “Addition of these services will provide new opportunities to our companies'', said Pakistan's Trade Counsellor in Colombo.

Business opportunities beyond the FTA are being explored. Pakistan mission in Colombo considers good opportunities for the export of surgical instruments, engineering goods, motorcycles and bicycles, cement, quality furniture, textiles, raw gemstones and livestock . The Indian FTA provides enough room for export of pharmaceuticals, chemicals, agro-based industry products, the FTA with Pakistan sets low ceilings for expansion of export base in Sri Lanka.

“This is one of the basic reason for lack of interest of many Pakistani businessmen in Pakistan-Sri Lanka FTA'', Mehemmed Aejaz observed. His advice was to keep pursuing the Sri Lankans to give an even playing field to Pakistan in export market.

“Rice is one item for which we seek better access in the Sri Lankan market'' Raees said pointing out that India enjoys a better access for rice than Pakistan. Pakistan normally harvests good rice crop every year and maintains good stocks. There is also a good demand for rice but sometimes the ``import duty is very high'', he said. Traders also confide that on a few occasions Pakistan and Indian traders join hands to service a tender of food grain won by either side.

An emerging trade conduit -DAWN - Business; August 27, 2007

 

[Neo]

Reforms to what end?​

According to the Director General (DG) of ADB’s Central and West Asia Department, Pakistan’s economic policy is headed in the right direction as “it would get Pakistan into the league of fast growing Asian economies.”

He further said that Pakistan now “required higher level of investments for job creation through second generation reforms.” In other words, the ADB official is saying that the first generation “reforms” gave jobless growth. If that be the case, is Pakistan, ala the DG, set to get into the league of fast growing Asian economies without all its people?

Whatever “league” Pakistan is set to enter would not be of much interest to the people if they are left behind in the race for a few to catch up to the exclusion of the many deprived? And, how might the result be called development if the target of all development, that is, the people at large are not targeted directly in the scramble for registering high rates of economic growth? Such growth is not just called jobless but is also called. “ruthless, voiceless, rootless, and futureless (and) is not conducive to human development” (UNDP’s Arab Human Development Report 2002. 16). Recently, the World Bank also expressed its dissatisfaction with the government’s performance on poverty reduction.

So, while the lending agencies used to take one view of economic growth and the UN system another, one of the two key lenders is attempting to see the reality. Having said that, the emphasis of all key lenders is on pushing in the same direction in the hope to include the bystanders at some point in time in the future about which they themselves are unclear. Emphasis, therefore, is on second generation reforms regardless of how various lenders may view progress on the first generation “reforms.”

A key mind-boggling issue, therefore, is whether even the reforms to come will lead to growth with equity. Both the World Bank and the ADB are emphasising infrastructure development. The ADB has further decided to provide $12—15 billion assistance to Pakistan over the next three years for infrastructure, utilities, governance reforms, and for the creation of better investment conditions.

While infrastructure and utilities are certainly needed to attract investment, a whole lot of other variables are required to improve the investment climate. Still more is required to ensure that the gains from higher investment are distributed equitably. It might be said that governance reforms are being undertaken for better service delivery. But governance reforms are not just about changing the organisational structures and compensation packages if organisational software of attitudes, style, and skills remains pretty much the same.

It is a fantasy to believe that improved infrastructure will by itself be powerful enough a magnet to attract investors. For, an infrastructure under growing threats of terror attacks will hardly be an inducement. There are serious issues in governance and structures of power in the northern areas that are now fast exporting traditional forms of life to settled areas per force. Currently, there are two opposing forces at work up north. One that wants to join the league of rapidly growing Asian countries through foreign investment and the other that wants to pull the society back in time that will require no investment, no growth, and no integration with the world. The integrative and isolationist forces are engaged in a tug of war with looming threat now that the latter might prevail or influence somewhat. This is a huge deterrent to foreign investment. Even if the integrative forces come to prevail, the concern is that this integration with the rest of the world may not necessarily mean integration within the country. And, lack of integration within marginalises people and provides impetus to the isolationist tendencies brewing fast.

So, an outcome of mal-distribution, inter alia, leads to the rise of forces that deter the variable of investment so strongly desired by the integrationists in the country. If investment climate is to improve, a frontal attack is required on the issue of mal-distribution of assets and income which, amongst other factors, fuel the isolationist tendencies that end up deterring investment.

At the same time, the issue of terror needs to be dealt with head-on so that Pakistan becomes a safe country for foreigners to bring their investment in for the long haul. Otherwise, infrastructure and utilities availability will by themselves not make a case strong enough to induce the investors when the issue of security is writ large on the national canvas and is gaining increasing visibility in the world.

As said earlier, the issue of governance is not just an issue of organisational structure and compensation when the attitudes are hardened in favour of status-quo. By and large, all eyes set on making a fast buck by fair or foul means. In the Islamic republic, there is little appreciation of Islamic teachings and this is the second contradiction mentioned in this piece that leaves us agitated.

On the one hand is the rising influence of the clergy and on the other hand is a growing deviation from Islamic teachings about which the clergy have nothing to say except to focus on the form and effect. This attitudinal outlook of making the most out of a situation in the short-term with little regard for the reason of being of the organisation in question will turn most investment projects into failures and will provide all the more reason for less investment and not more.

Unless the attitudes are made to turn around by inculcating a sense of mission in people, investment will not turn over into better outcomes and will, therefore, not beget more investment. A key challenge in governance is to turn anti-developmental attitudes into development-oriented attitudes by deploying the state-of-the-art in management technology.

Modern management, however, requires a mindset that is based on sharing of power, ideas, profits, honesty, sincerity, sense of purpose, and pursuit of lofty goals in life to realise one’s potential for collective societal gain. The above values are anathema to the mindset prevailing that is driven by a lust for power, money and in ways strictly prohibited in all religions. A major attitudinal turnaround effort is required to make the governance reforms succeed, without which, these will be yet another exercise in making the existing minds sit in new boxes that will make no difference unless the minds have undergone a sea change.

It is the anti-development attitudes that further prevent distribution from growth. For, to stay in the office, alliances are built by the “resourceful” whose power and pelf must maximise before all and in consideration of which they give political support to the rulers who must arrange to distribute first to their political supporters or maintain status-quo in their interest and in their own.

As mentioned previously, it is the state-of-the-art in management in all spheres that will facilitate turnaround in governance and will bring us closer to being what is Islamic in substance. Once Islamic in action, the country will be better equipped to break the monopoly of the clergy on religion. Negative spillovers from clergy’s monopoly will be better dealt with collectively.

Possibility of higher investment and distribution from growth will then arise which is currently smirked at by the sections of society deeply steeped in a “tradition” that should not be ‘ours’. This crucial aspect of reform can be contemplated by no lending bank but must grow indigenously. Otherwise, generation after generation of reforms will not show the results that people call ‘development.’

Reforms to what end? -DAWN - Business; August 27, 2007

 

[Neo]

Low inflation for economic stability​

President Musharraf has come up with Vision 2030. It is the longest distance vision in public life — 23 years. Other visions were for far shorter periods and with specific objectives and targets.

This vision is much broader and marked for its generalities. In fact, it is platitudinous. It is the vision of technocrats, not a party manifesto. It is not approved by the cabinet or endorsed by the national assembly. Nor is there any move for that. It is his election manifesto.

Earlier, the people were familiar with Perspective Plans for 20 years and then for 15 years, arguing 20 years was too long a period. Now there is vision for 23 years but it says the obvious and unexceptionable. What matters is what is done in practice.

The Vision contains no specific commitments that it seeks to fulfil and no specific targets, not even in the crucial energy sector. It is obvious that five-year plans are needed for a poor country to make the best use of its limited resources and for the largest number of poor and low income groups to benefit by the economic growth-- including drinking water for all and electricity in every home without frequent power failures.

The president wants political stability and sustained economic development. To achieve economic stability, sustained low inflation is needed, more like the two per cent in USA.. India has an inflation rate of 4.4 per cent and China is taking firm measures to lower the inflation rate to 5.2 per cent, caused by the overheating of its economy.

Inflation may be inevitable when an economy grows very fast and measures have to be taken to keep it low but the economic growth of Pakistan is not at the rate of China`s and yet we have an inflation of seven per cent along with the food inflation of over 10 per cent because of the free- for- all market practices.

Low inflation is the centre piece of economic stability. High inflation has many negative fall outs.

It is claimed that the core inflation has come to 5.2 from 5.6 per cent last year but what use is an inflation index that does not take into account the far higher food inflation and high energy prices in a country in which each family has a large number of dependents and one- third of its people live below the income of a dollar a day.

High inflation is one of the major causes of the under-nourishment of the people , particularly the children who are exposed to various diseases and that inflates the medical bill. It spurs corruption among the lower ranks of government employees and once an employee embarks on the road of corruption, he tries to make more and more money. High food prices are also behind the factors which make young men turn to crime and move from small crimes to big time crimes.

Violence against housewives is often caused by the high food prices as the mother cannot feed too many children on a low family budget. With low inflation we have few industrial strikes and less waste of the productive hours. Sustained inflation makes exports more costly and our products less competitive abroad. As a result we tend to lose our export markets. High inflation makes industrial investment more costly and delays the development of the country.

Sustained inflation makes the rupee weak and eventually it gets devalued or slides down in relation to the dollar. That is how our rupee has come to 61 to a dollar from Rs335 in the 1950’s. While the Indian rupee after revaluation hovers around Rs40 to a dollar. In spite of the obvious adverse results of high inflation, the government has been averse to taking firm measures to check soaring prices. Policies announced are not enforced and the profiteers and hoarders have a field day and cartels thrive fixing the prices higher and higher.

The government instead comes up with palliatives like the Ramazan package with a subsidy of Rs1.49 billon but there are barely 1000 utility stores through which the subsidised goods will be sold. So, the people have less access to such goods. Another 4000 more utility stores are to be opened all over the country eventually on the basis of one in each union council. But that is taking a long time. Even 5000 utility stores cannot meet the needs of the entire country and the cost of transportation to the utility stores and back home may negate the relief provided by these stores.

Meanwhile, flour mills have raised the price of atta as they do at every available opportunity. The city administration has reached an agreement with the traders on Ramazan prices but usually the prices are maintained as agreed for a few days and then the whole system collapses. There is a free for all and the market thereafter. The city administration should make sure that does not happen this time. The situation demands long-term sustained solutions instead of snap measures which fail after initial success and the people should also cooperate by not over consuming in Ramazan as is usually done and make Ramazan a season for feasting instead of fasting. If the president wants economic stability, he should strive for price stability along with low inflation and that can save the country from many ills, political, economic and social. A restrained monetary policy as practiced by the State Bank of Pakistan which has raised the discount rate to 10 per cent is not enough. The Governor of the State Bank, Ms Shamshad Akhtar has urged the government to take adequate administrative measures to ensure fair prices to supplement her efforts. But such efforts have not been forthcoming.

The president wants general elections every five years and five year plans. The right thing to do would be for every major party to have its own five-year plans. The party successful in the elections should enforce its five- year plans.

It is easy for the rulers to promise many things to the people but difficult to deliver them. Sometimes, the failure is due to indiscreet practices and outright violation of commitments.

In Pakistan, the people are not given a chance to reject such governments, instead the army removes them and seizes power. Then after a while the people want the army out of power. This vicious cycle has to come to an end and the people allowed to punish the betraying leaders though periodical elections and choose the new leaders while the army stays away from the political arena.

Low inflation for economic stability -DAWN - Business; August 27, 2007