Pakistan Economy - News & Updates - Archive

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New systems for SMEs being developed​

KARACHI, Aug 30: The Small and Medium Enterprises Development Authority (Smeda) will shortly develop systems for SMEs in areas of accounting, technology, production enhancement, packing, storage and logistics.

With regard to SMEs specific banking products, Smeda chief Shahid Rashid said in a meeting with members of Small and Medium Enterprises Union (Unisame) on Thursday that the authority would work on this matter with the ministry of finance.

He further stated that the Smeda would work with the national committee on SMEs for implementation of an SME policy recently announced by the government.

The authority, he said, had been taking up one industry after the other for upgradation and modernisation, such as jewellery and marble, and it was now working on furniture industry.

He also assured the participants that the authority would jointly work with trade and industry for growth of SMEs in all sectors.

Shahid Rashid informed the Unisame members to visit Smeda offices and its website and apply for the feasibility and other services available for SMEs.

Zulfikar Thaver, president of the Unisame, asked the Smeda chief to take up the basic issue of finance and technical education, raw material, marketing and logistics on a fast track to provide an enabling environment for SMEs.

He said SMEs need finance on single digit mark-up without collateral, and they also need land at concessional rates.

Other matters raised in the meeting were about product improvement, machinery up-gradation and modernisation facilities.

The Unisame members also sought uninterrupted supplies or raw material and marketing projection in international market of their products.

It was also pointed out that so far no scheduled bank had made any product for SMEs for finance at special rates. However, some of the participants drew the attention of the meeting towards the SME policy and said that there were certain grey areas which need to be corrected.

They said that definition and labour laws should be made easy for SMEs.

Mr Thaver pointed out that legislation of the SME Act during the present National Assembly session should be made.

He added that the SMEs were anxiously waiting for an SME export house, SME promotion council, SME insurance, SME institute, SME ombudsman and other supporting organisations promised in the policy.

New systems for SMEs being developed -DAWN - Business; August 31, 2007

 

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Tax collection grows by 15.6pc​

ISLAMABAD: The Federal Board of Revenue (FBR) has surpassed its revenue collection target of Rs 106.4 billion assigned for the months of July-August 2007-08.

Figures obtained from the FBR show that the provisional tax collection indicated a cumulative growth of 15.6 percent. The net collection during the period has been Rs 107 billion against Rs 92.5 billion in the same period last year.

The revenue on account of direct taxes has maintained its buoyant posture, as Rs 28.2 billion have been collected during July-August 2007 against Rs 21.2 billion last year, showing a remarkable increase of 33 percent.

Sales tax collection has reached Rs 53.4 billion against Rs 44.9 billion, indicating a growth of 18.9 percent, whereas the growth in sales tax (import stage) was quite modest. Domestic sales tax collection has increased by 55.4 percent going up from Rs 15 billion to Rs 23.3 billion. Tax receipts on account of excise duties have recorded a decrease of 8.6 percent due to change in reporting procedure. The collection has declined form Rs 8.6 billion last year to Rs 7.9 billion this year. Finally, notwithstanding the widespread disruption of business activities due to heavy rains, the collection of Rs 17.5 billion form customs duties has been fairly close to last year’s figure. The net collection of Rs 56.6 billion during August 2007 is expected to increase further when provisional figures are finalised. According to the tax-wise collection during August 2007, FBR managed to collect income tax of Rs 14.3 billion, sales tax of Rs 27.2 billion, federal excise duty Rs 7.9 billion; and customs duties Rs 8.8 billion.

Daily Times - Leading News Resource of Pakistan

 

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Pakistan yet to take advantage of export opportunities​

ISLAMABAD: Despite growing international demand and a range of highly attractive economic benefits, many developing economies including Pakistan are yet to take full advantage of the opportunities that exist in exporting services.

Currently, Pakistan has a very low share of the international services market. Economic significance of the service sector in Pakistan's economy is that it contributes to 53.3 percent to the Gross Domestic Product (GDP). The government has set the growth target for the service sector as 7.1 percent for the year 2007-08, while last year it was recorded at 8 percent.

Almost six percent is the target for 2007-08 for transport, storage and communication, 7.8 percent for wholesale and retail trade, 15 percent for finance and insurance, four percent for public administration and defence, and five percent for social community and personal services.

In recognition of Pakistan's potential in the export of services, the International Trade Center (ICT) has developed a "Pakistan National Services Roadmap", the purpose of which is to provide recommendations that will facilitate growth in Pakistan's services exports. Key strategic areas identified in the roadmap are strengthening institutional support for service providers, streamlining the regulatory environment by the government, strengthening the infrastructure and providing better information and support to stakeholders.

The roadmap recommends that services trade associations need to be strengthened through export-oriented policies of the government, training and financing and encouragement to form services coalition and enterprise networks.

Other organisations such as the Overseas Employment Corporation (OEC), the Small and Medium Enterprises Development Authority (SMEDA), the Industrial Information Network (IIN) and the Pakistani mission abroad can also play stronger roles in enhancing services exports by addressing the trade issues within their domains.

It is also recommended that regulation may be reviewed and where possible, simplified to facilitate services exports. Different service sectors in the country, including construction, legal and accountancy, require regulations that support the export plans of firms. No regulatory environment can be effectively streamlined until it addresses the concerns of the stakeholders, and this needs to be pursued through consultation. The roadmap, through its recommendations, invites stakeholders to participate actively in such a process.

The recommendations to strengthen services infrastructure include human resource development based on national needs, an improved financial lending environment, a stronger telecommunications infrastructure, and better utilities and transport. A skilled human resource base, matching international market need, is the key to the export of many services. The roadmap recommends education and training in priority fields and places special emphasis on improving English language skills.

Access to finance is a problem for the service exporters of Pakistan. The roadmap provides a number of options and recommendations to the State Bank of Pakistan and other local banks to improve service export lending facilities. Service exports are critically important to the Pakistan economy as it can increase foreign exchange earning, the competitiveness and innovation of service firms, can strengthen domestic capacity and decrease reliance on imports, as well as more jobs for skilled and semi-skilled people.

Increasing institutional support provided by trade promotion bodies, streamlining the regulatory environment, strengthening the service input infrastructure, and focusing on service sectors with high export growth potential will bring momentum in enhancing the capacity of the sector for exports.

Daily Times - Leading News Resource of Pakistan

 

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Export refinance: 7.5 percent mark-up rate to continue ​

KARACHI (September 01 2007): The central bank on Friday announced that it would continue 7.5 percent mark-up on export refinance scheme. The central bank, in a circular to all heads of the banks, said that the existing rate of mark-up on export refinance would continue for September.

It reiterated that the aggregate financing facilities, provided by banks under the export finance scheme (central bank and bank funded) would continue to carry a maximum mark-up of 7.5 percent irrespective of the fact that the State Bank of Pakistan (SBP) had revised mechanism for grant of refinance, provided the request for financing by the exporters to fulfil the lending conditions of the financing bank and conditions/criterion prescribed under the scheme, central bank added.

Business Recorder [Pakistan's First Financial Daily]

 

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PM urges German bank to invest in more projects​

ISLAMABAD, Aug 31: Prime Minister Shaukat Aziz on Friday said that economic indicators in Pakistan were showing positive trend and the country offered attractive business opportunities to both local and foreign investors in all sectors.

He was talking to a delegation led by Chairman DEG, Winfried Polte at the Prime Minister House.

DEG, a German investment bank, is a member of KfW Bankengruppe, one of the largest European development finance institutions, which has contributed to the financing of 28 projects in Pakistan with an overall invested amount totalling 120 million euro, while its worldwide investment stands at euro 45 billion.

The prime minister said Pakistan offered a level-playing field to all investors and imposed no restriction on percentage ownership.

He said foreigners were encouraged to invest in all sectors and the country offered attractive investment opportunities in several sectors, including telecom, IT, oil and gas, financial services, engineering, insurance, agribusiness and real estate.

Mr. Aziz said that during the last five years the per capita income and size of the economy had doubled, remittances had increased, exchange rate was stable while debt burden and poverty had reduced and reserves had crossed $16 billion, an all time record level.

He said that because of high economic growth during the last five years and expansion in various fields the middle class was rapidly growing and demand for consumer goods was increasing.

The prime minister said that because of consistency in policies and a structural reform agenda based on de-regulation, liberalisation and privatisation Pakistan has attracted over $8 billion worth foreign investment last year, which is highest in the country’s history.

Talking about the demographic advantage, which Pakistan has over other countries in the region, he said that Pakistan had 100 million of its population below the age of 25. The government was focussing on educating and training this vital human resource.

The prime minister noted with satisfaction that economic cooperation between Pakistan and Germany was increasing, particularly in trade and investment.—APP

PM urges German bank to invest in more projects -DAWN - Business; September 01, 2007

 

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Jetro concerned about economic situation ​

KARACHI (September 01 2007): Although Pakistan has become a manufacturing partner of Japan, from just being a trading partner, as Japanese companies are now willing to shift their production base to Pakistan, many private inquirers from Japan are hesitant till the election time is over.

According to Japan External Trade Organisation (Jetro) analysis of economic partnership between Pakistan and Japan, it (Jetro) is quite concerned about the economic situation in Pakistan because of the events of May, the recent political uncertainties and as the nearing of election time. It is not very clear as to what the future will unfold, it said.

Japan has been supporting Pakistan in developing its infrastructure so that the technology gap and quality of human resources between the two countries can be filled up. The dynamics of trade between Pakistan and Japan have totally changed with the passage of time.

Initially, a major exporter to Japan, Pakistan is now a major importer from Japan. According to trade statistics of Japan Ministry of Finance, Pakistan's exports to Japan increased by 44.8 percent to $0.281 billion in 2006. In the same period, imports from Japan into Pakistan stood at $1.76 billion, showing a 15.9 percent increase as compared to the previous year. Associated transport equipment and machinery and mechanical appliances hold 70 percent share in total imports from Japan.

Transport equipment showed an increase of 21.6 percent from 2005 mainly due to the surge in market demand for cars and the subsequent imports from Japan. Machinery and mechanical appliances mainly include textile machinery and have shown a small increase of only 4.8 percent as compared to last year.

The Japanese trading houses in Pakistan and the textile associations are of the view that the textile industry is currently not thinking of heaving investments and expansions as the exports have not been increasing up to the mark.

Textiles constitute 37.6 percent of Pakistan's total exports to Japan. In 2006, textile exports to Japan were $78.2 million which showed a 7.6 percent decrease as compared to the previous year. Direct investment recently has shown a very encouraging trend in the last couple of years, increasing by 41.1 percent in 2006-07 to $68.3 million. The foremost area of investment is the automobile sector.

According to Pakistan Automobile Manufacturers Association (Pama) statistics, production of cars stood at 0.126 million units in 2004-05 and in 2005-06 it increased to 0.16 million units. The share of Japanese carmakers in Pakistan market is an overwhelming 96 percent. Each Japanese company has expanded its production capacity.

Pak-Suzuki, the leading market holder in Pakistan, increased its production capacity from 70,000 units per annum in 2005 to 150,000 units per annum by 2007. Indus Motors and Honda cars both increased their production capacity from 43,000 and 25,000 units respectively to 50,000 units by 2006.

Japanese motorcycle manufacturers have also increased their production capacity. Recently, Atlas Honda, the leading market shareholder in motorcycles, built a new factory with increased production capacity from 0.4 to 0.5 million units per year.

Apart from automotive, huge Japanese investment is coming in the textile sector as well. YKK Zippers has started constructing its factory at Karachi Export Processing Zone (KEPZ). The lease contract for the factory is for a premise 50,000 sq metres.

The first phase of development is being done on 8,600 sq metres facility, at a cost of $15 million investment since January 2007 including the cost of the contract. Recently, NYK Group South Asia Pte Ltd, a Singapore-based wholly owned subsidiary of Nippon Yusen Kabushiki Kaisha, Japan, has established NYK Line Pakistan (Private) Ltd.

The new company began operations on August 20. The annual container handling volumes at the Port of Karachi has reached one million TEUs, and growth is expected to continue. The purpose of the establishment of this company is to respond to increasing demand in this region.

Pakistan is also known as the gate port to countries in Central Asia, and this local company will allow better response to customer needs in this region. NYK Line Pakistan (Private) Ltd is NYK's 13th regional shipping agent in Asia.

Additionally, Mitsui O.S.K Lines Ltd (MOL) opened a new subsidiary in Pakistan, effective April 2007. Mitsui O.S.K. Lines Pakistan (Pvt) Ltd will handle all MOL's liner and non-liner business and Ocean Consolidation Business (OCB).

The new company will assume the duties currently handled by Asiatic Shipping Agencies (Pvt) as MOL's sole agent in Pakistan. MOL had been expanding various ocean shipping businesses with Asiatic Shipping Agencies (Pvt) as its sole agent in Pakistan, but now deems it necessary to establish an agency with its own paid-in capital of $0.2 million to continue its expansion strategy in Pakistan, which is experiencing tremendous economic growth.

Business Recorder [Pakistan's First Financial Daily]

 

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Palm oil imports in July soar to $114 million ​

KARACHI (September 02 2007): The import of palm oil has gone up by 90 percent to 114 million dollars during July as compared to 60.204 million dollars in the same period of the last fiscal due to increasing demand ahead of the holy month Ramazan, importers said on Saturday.

They said: "Consumption of the commodity increases every year during this period ahead of the holy month due to increasing demand of ghee and edible oil, which are used for preparing different food items.

"We have imported some 114.011 million dollars worth of palm oil during the first month of the current fiscal as compared to 60.204 million dollars during the same period of the last fiscal year, showing an increase of around 90 percent or 53.8 million dollars upsurge during July," said a leading importer.

In terms of quantity, it depicts an increase of 20,730 tonnes during July, as overall 156,251 tonnes of palm oil has been imported during July against the import of 135,521 tonnes during July 2006.

On monthly basis, the commodity's import during July as compared to June 2007 also depicts a raise of 47 percent to 114 million dollars against 77.805 million dollar during June 2007. The importers said that consumption of edible oil is also rapidly going up which is another reason of rising import of the commodity during the first month of the last fiscal.

The commodity import during last fiscal has also gone up by 24 percent to 891.785 million dollars, however they believed that during current fiscal year the import of palm oil would reach at the peak level of 900-950 million dollar with over 30 percent overall upsurge.

"August-October period is arrival season of the commodity in the Malaysian and Indonesian markets, therefore we have imported huge commodity to meet the local demand," they added.

Business Recorder [Pakistan's First Financial Daily]

 

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Hydropower deal ​

Sunday, September 02, 2007

ISLAMABAD: The Implementation Agreement (IA) for 84 MW New Bong Escape Hydropower Project by Laraib Energy Limited was signed at the Private Power and Infrastructure Board (PPIB).

CEO of New Bong Escape Hydropower Project Khalid Faizi signed the agreement on behalf of the company, while on behalf of the Government of Pakistan the agreement was signed by Managing Director PPIB, Mohammad Yousuf Memon.

The power plant will be located 7 kilometres downstream of Mangla Dam, in the Azad Jammu and Kashmir and will sell power to WAPDA/NTDC.

The sponsors of the project include local Pakistani investors, as well as investors from Malaysia and Mauritius, while the Asian Development Bank (ADB), Islamic Development Bank (IDB) Habib Bank Limited (HBL) and National Bank of Pakistan (NBP) are lenders to the project; the total estimated cost of the project is US$ 160 million.

It is expected that the power complex will start supplying power to the national grid by the year 2011.

This is the first hydropower plant in the private sector to have completed the major milestone of finalizing the IA, and will supply clean, reliable and cheap energy to power consumers of Pakistan.

Hydropower deal

 

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Americans are accepting Pakistan as an investment hub: Majyd Aziz​

Sunday, September 02, 2007

KARACHI: The President of the Karachi Chamber of Commerce and Industry (KCCI), Majyd Aziz, in an interview with The News talks about his recent trip to the USA and how he thinks the political situation is likely to affect the country’s economy. Here is what he has to say.

Q: How was your journey and what was the aim of it?

A: This trip to the US was the first ever by any KCCI delegation. We didn’t go for any individual gains, and the main objective was to promote Pakistan. We discussed bilateral trade, intellectual property rights, market access, the image of Pakistan as an investment hub, prospects of SMEs, etc.

We went to convince that America needs to invest here, especially Americans of Pakistani origin as their roots are in Pakistan. An interesting fact that we noticed was that Americans are finally accepting Pakistan as an investment hub with good opportunities other than India with whom they’ve always had strong ties.

Q: How successful was your trip?

A: It was the first time we had one-to-one discussion. People think America is trying to destroy the Muslim world, which is untrue.

America itself wants to move away from political talks and in fact they want to have a 15-year long-term economic commitment with our country which is now more reformed and intensive than ever before.

Other than this, we had four roundtable conferences to discuss the Kashmir issue at the economic level. You see we went as businessmen but became diplomats and politicians! Apart from this we also met about eight Congressmen individually and spoke on political issues which seemed to be a success.

Q: Would such meetings be held again with the US or any other country?

A: Some European diplomats have invited me to their country so that we can have similar meetings with them, too. But nothing has been confirmed so far.

Q: Did Americans promise to visit Pakistan?

A: A delegation from Texas has confirmed with the KCCI to visit Pakistan in spring 2008.

Q: What has America got to say about the technology standards of Pakistan? How far are they willing to aid our manufacturing sector?

A: We are far behind America in technology! It is easy to talk about technology transfer, but it has many aspects that need to be looked into. For example, there are intellectual property rights, company policies, etc. that cause obstacles.

These things need to be discussed at the Ministry of Commerce or by the nazims of the cities concerned.

My advice is that a body should be constituted to discuss trade and investments and local talent can go there for training at their companies. That is how technology cab be brought into the country.

Q: What would you like to say about the current political situation? How much does it affect our economy?

A: In spite of the so-called political instability I say this is the creation of political ‘jonnies.’ It doesn’t affect the rest of the country and neither does it affect the businesses. Musharraf has done a good job in stabilising the economy. Fact is fact. Look at where we were in 1998 and compare it with the present. I’m sure even the opposition parties are well aware of what the president has done for Pakistan.

One thing that I want you to mention here is that none of the political parties have come up with any economic agenda, or manifesto.

What are they waiting for? They should come up with economic policies with the same passion as they show when they talk about ruling the masses. All these parties are power hungry.

Americans are accepting Pakistan as an investment hub: Majyd Aziz

 

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Informal sector grows by 20pc​

ISLAMABAD, Sept 1: Pakistan’s informal sector has grown at an unprecedented pace over the years and today 72.9 per cent of the non agriculture workforce is employed by this sector.

Informed sources told Dawn on Saturday that there has been 20 per cent plus growth in the informal sector and the issue has become a matter of great concern, with government considering a proposal to bring the informal sector in the mainstream through its “decent work country programme”.

According to a conservative estimate, out of $160 billion size of country’s economy, $32 billion plus is in the informal sector, providing a huge opportunity to its businessmen to evade taxes every year.

According to the latest details 32 per cent workforce is in the wholesale and retail business, 21 per cent in the manufacturing sector, 17.5 per cent in community and social and personnel sector, 13.8 per cent in construction and 11.1 per cent in the transport sector. This included both in urban and rural areas.

The informal sector consists of small units producing goods or services with the primary objective of generating employment and incomes to the families engaged in these activities. Informal activities have often been characterised by low levels of capital, skills, access to organised markets and technologies; low and unstable incomes and poor and unpredictable working conditions. Such activities are often outside the scope and purview of the official statistical enumeration and government regulations as well as are beyond formal system of social protection.

The units operating in the informal sector are highly labour intensive but employment is mostly casual; based on kinship, personal relations rather than contractual arrangements ensuring protection. The informal sector activities depend, to a large extent, on the local and regional demand.

The focus should be on productive and decent employment creation rather than low productivity and marginalised jobs that largely create a pool of working poor.

The informal sector, the official said, plays a significant role in employment and income generation in Pakistan but is marked with extreme inadequacy of detailed and reliable data.

According to latest official data, more than three fourths of the employees’ monthly income is even less than Rs1,500. More than quarter of males and two thirds of females have monthly income of less than Rs2,500.

The regional analysis shows that a higher proportion of females earn less than minimum wage in both urban and rural areas as compared to males.

Pakistan, he said, needs skilled labour which should be accounted for in the formal sector properly. The access to high quality goods at lower prices due to globalisation has brought changes in the structures of production.

The easier growth options are no more available and penetration in the global market is critically linked with the skills and

capabilities of the workforce. Meeting the challenges require retaining technical and vocational competence as well as productivity of the workforce through better education, training and retaining.In the past the focus was largely on the demand augmentation rather than addressing this supply side issues.

Resultantly, the vast treasure of the nation is mostly untrained and not ready to take the high value added production. And this unskilled labour is mostly employed by the informal sector whose employers also offer fewer wages to their employees.

A large proportion of the current labour force does not possess skills measurable in higher education terms. Literacy level is as low as 52 per cent. The educational distribution of literates shows that 35 per cent are below matric, 10 per cent are matriculates and 4.1 per cent have higher secondary certificates. The degree holders account for only a small (3.8 per cent) proportion.

Informal sector grows by 20pc -DAWN - Business; September 02, 2007

 

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Indus Motor cars sale up by 19pc​

Karachi, Sept 1: Sales of Indus Motor Company (IMC), makers of Toyota and Daihatsu vehicles, have increased to 50,557 units for the year ended June 30, 2007 as compared with 42,406 units in the corresponding period of last fiscal, up by 19 per cent, says a press release.

Production went up by 15 per cent to 47,821 units from 41,552 units last year. The company’s sales revenue increased by 11 per cent to Rs39 billion from Rs35 billion last year with the after-tax profit of Rs2.7 billion, as compared to Rs2.6 billion achieved during the year ended June 30, 2006.

Earnings per share went up to Rs34.93 as compared with Rs.33.70 in the previous year.

The board of directors of IMC, which met on August 31 to review the company’s financial and operating performance for the year ended June 30, 2007, declared a final cash dividend of Rs8 per share, making a total of Rs13 per share during the year.

The total dividend paid for the same period last year was Rs12 per share.Giving an overview of the entire local industry, IMC said that total sales for locally assembled passenger cars and light commercial vehicles during 2006-07 grew by nine per cent to 204,212 units compared with 187,436 units in 2005-06.

Production was recorded at 196,405 units for the period ended June 30, 2007, showing an increase of four per cent over 189,138 units last year.

Although there has been a decrease in the import of used cars from 46,425 units in 2005-06 to 28,493 units in 2006-07, these imports are still 14 per cent of the domestic passenger car and LCV production and continue to impede growth of the local auto industry.

Indus Motor cars sale up by 19pc -DAWN - Business; September 02, 2007

 

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EC-funded tech aid puts Pakistan's trade on right direction ​

ISLAMABAD (September 02 2007): The 'Trade Related Technical Assistance' (TRTA), funded by European Commission (EC), has achieved a great success in making positive contribution towards developing Pakistan's trade capacity.

"The TRTA, initiated in 2004, is scheduled to be terminated by September-end," official sources said, adding that, witnessing the success of the programme, the government has requested the EU to support another TRTA for trade capacity building.

The programme was launched to help Pakistani firms develop dynamic exporting capabilities, reduce export challenges, and raise their trading capacity through planned investment in technologies to meet export market requirements and strengthening institutional infrastructure services for conformity assessment.

The TRTA project has laid solid foundation in enhancing Pakistan's capacity to trade and access to international markets, sources said, adding that "the programme has provided significant interventions in strengthening the capacities and capabilities of the mainline ministries and institutions concerned with commerce and trade.

There is need to continue this effort into the future so as to consolidate the gains made, and complete the trade capacity building process initiated under the programme, they added. "The government has already made a formal request to the EC in this regard," sources said, and expressed the hope that the EC would favourably consider the request, "and continue funding for the purpose."

The TRTA programme had made a positive contribution in developing Pakistan's trade capacity and it would help Pakistan's exporters to reduce cost of the local products. "The exporters will now be able to send their products for testing to local laboratories that are in the process of accreditation," sources said, and added that "at the same time, authorities in European Union will now have more confidence in the results of tests made in Pakistani laboratories."

The TRTA programme would allow Pakistan to properly defend its interests in the World Trade Organisation (WTO) because its government officials have now been trained to better understand the rules and functions of the WTO.

"The programme helped enhance awareness among government officials, the business sector, and civil society about the implications of WTO Agreements on the economy of the country," they said.

Besides, the programme assisted Pakistan in building capacity to address technical barriers to trade and sanitary and phytosanitary compliance requirements, sources added.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistan looking to carve out tech role ​

WASHINGTON (September 02 2007): Seeking to carve out a share in the bulging market for offshore outsourcing services, Pakistan offers many advantages in terms of labour costs, widespread use of English and increasingly open and well-regulated business environments, according to two recent reports.

Pakistan's information technology sector has witnessed consistent growth in the last few years despite geo-strategic challenges and the country has set upon achieving ambitious targets through a series of steps.

The South Asian country is listed among countries holding out a vast potential and financially more attractive than some major current destinations, according to Global Services Location Index 2007.

"Pakistan is trying to enter the off-shoring marketplace largely through contact centers and back-office services. Companies have set up approximately 100 contact centers in the country in the past three years. In addition to telemarketing, Pakistani workers provide payroll, accounting and human resources work," A.T. Kearney, a global strategic management consulting firm says while discussing off-shoring for long-term advantage.

The global market for shared services and outsourcing is expected to grow to 1.43 trillion dollars by the end of 2009, from 930 billion dollars in 2006, according to a report. Meanwhile, a report in PC World Communications, citing entrepreneurs and officials, has highlighted advantages the South Asian country offers in terms of its skilled yet inexpensive human resource, some of the factors considered vital to bolstering the IT business.

"The country's highly skilled, English speaking people provide a key advantage," said Yusuf Hussain, Managing Director of the Pakistan Software Export Board (PSEB). Ashraf Kapadia, President of the Pakistan Software Houses Association (PASHA), an association of software, call centre and BPO companies in the country, underlines investors' continued confidence in Pakistan's potential.

Pakistan's exports of IT and services have grown by 50 percent year-on-year for the last three years. The PSEB now has an ambitious target to boost exports of software, IT services, call centre and BPO from 1.4 billion dollars in the fiscal year ended June to about 4.5 billion dollars by 2010. By then, the overall IT and services industry in the country is also expected to grow to 10 billion dollars from the current 2.4 billion dollars a year.

"To spur the country's outsourcing industry, PSEB and other Pakistan government agencies have launched a multi-pronged strategy covering infrastructure, cheaper communications, investment in education, quality certifications and a data confidentiality law."

The PSEB is also investing in promoting Pakistan as an offshore location to European and US companies. Not many people outside Pakistan knew, for example, that the country had over 63 million mobile phone subscribers for a population of about 164 million people, he said. The percentage of Pakistan's population using mobile phones is more than that of India, which is seen as a key Asian market for mobile-phone vendors.

In addition, the country is investing in education with an eye to avoid the shortages of staff that have affected India's outsourcing industry. The annual budget of the Higher Education Commission had gone up to about Rs 30 billion Pakistan (497 million dollars) from Rs 600 million seven years ago, according to Hussain.

Business Recorder [Pakistan's First Financial Daily]

 

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Work on uplift works of Corridor-II starts ​

KARACHI (September 02 2007): The construction work of signal-free Corridor-II has started at a cost of Rs 1.38 billion and four flyovers as part of the Corridor would be completed in four months. Nazim Karachi Syed Mustafa Kamal said on Saturday that work on any development scheme of the corridor will not be started without construction of alternate road and taking the traffic police into confidence.

He said that initiation of work on four flyovers will cause no traffic problem and rather smooth traffic flow will be greatly felicitated so that citizen may not face any problem. He stated this during a 4-hour visit to development works of the project and inspection of alternate road for traffic from Nagan Chowrangi to Sharea Faisal at 2 am Saturday.

He was accompanied by DCO Javed Hanif, MD Water Board Ghulam Arif Khan, EDO Works and Services and representatives of contractor consultant firms. City Nazim Karachi said that the system with regard to development projects has been changed and the agreement now incorporates that the contractor firm will be responsible for any defect or error in the quality of project, because the firm is paid huge amount for this.

Business Recorder [Pakistan's First Financial Daily]

 

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Rs 520 billion to be spent on NTC and road network uplift ​

ISLAMABAD (September 03 2007): The government has chalked out a plan to develop National Trade Corridor (NTC) in order to boost trade activities and exports. A source in ministry of communications told APP on Sunday that the NTC will link upper parts of the country in the North with ports in the South to reduce travel time and fuel cost by improving existing road network and introducing new highways and motorways by 2012.

The government would spend Rs 520 billion on NTC and road network development to complete all the projects. It will cause multifaceted benefits, reduce the losses and significantly contribute to the national exchequer, he added.

On completion of the national trade corridor by 2012 the cargo travel time from Karachi to Peshawar would be reduced from 72 hours to 36 hours, and road losses would be reduced to the tune of over one billion dollars per annum which will reduce annual transportation cost by 10 percent, the source added.

Talking about steps being taken for development of road network, he said, China had agreed to widen and re-habituate 600 kilometres of KKH with the cost of 350 million dollars.

He said that the main artery and the main North-South corridor linking Karachi with Torkham on Pakistan-Afghanistan border via Lahore, Rawalpindi and Peshawar the National Highway N-5 is the mainstay of the country's road network and its economic lifeline. The Grand Trunk Road N-5 is being converted into a dual carriageway.

Similarly Indus Highway, (N-55) which is on the left bank of the Indus River, is also being constructed according to the specifications of the Asian Highways recommended by the Asian Development Bank. After construction of the Kohat Tunnel, N-55 is set to play a vital role not only for Pakistan but for inter-regional connectivity also, he added.

The transport cost of trade goods would be reduced through restructuring and modernisation of railway, under the NTC programme, which will contribute in terms of saving of $2 to 2.5 billion per year. The administrative measures, reducing documentation would result in saving of $1.2 billion per annum, he said.

He said that the modernisation of existing trucking fleet was also planned, which would reduce fuel import bill by 25 percent and road maintenance cost by one billion dollars. The ministry of communications had also moved a proposal to reduce tariff on multi-axle vehicles for five years to implement the plan, he informed.

Business Recorder [Pakistan's First Financial Daily]