Pakistan Economy - News & Updates - Archive

[Moin91]

Emirates aims to provide quality products​

Friday, September 07, 2007

KARACHI: President Emirates Global Islamic Bank Ltd Syed Tariq Husain said on Thursday with the implementation of CRM system, Emirates has become the first bank in Pakistan to deploy Oracle-Siebel solutions.

The objective is to provide quality and Shariah-compliant financial products and services.

CEO Integrated Technology Partners Anwar Matin, on the occasion, said with the successful installation of CRM solutions, the banking industry of Pakistan had an option to source Pakistan-based expertise to provide world-class services to the consumers.

He said the ITP was the first Pakistani IT company to carry out end-to-end implementation of Oracle-Siebel solutions in the financial services sector, using a combination of local and internationally-trained and accredited resources.

CIO EGIBL Ahmed Saaqib Asad said “the system is now up and running with all the call centre supervisors, having access to EGIBL Oracle-Siebel CRM.”

Emirates aims to provide quality products

 

[Introvert]

Pakistan to export bed sheets to China; Chinese Textile delegation to visit Pakistan next year : PTE

BEIJING, Sept 7 (APP) - A delegation of Textile manufacturers from Shanghai is scheduled to visit Pakistan next year to explore the avenues to import Textile products from Pakistan.

This was stated by Chairman Pakistan Textile Exporters Association (PTEA) Zahid Aslam while talking to APP from Shanghai where he along with an eight-member delegation held successful negotiations with their Chinese counterparts in Shanghai, Ningbo and Changzhou to find out markets to enhance export of Pakistani Textile products.

He said that during meetings in these cities, he invited the Chinese textile manufacturers to Pakistan to see themselves the conducive business environment available there.

The Chairman PTEA said that he was delighted that they have accepted his invitation and agreed to visit next year.

Zahid Aslam said that we were successful in obtaining export orders for supply of five containers of bed sheets which is the beginning and expressed the hope that more orders would be forthcoming in future.

He pointed out that we would start exports of bed sheets to China from next month.

The Chinese side, he said expressed willingness to import from Pakistan Yarn, Fabrics and Bed sheets as they were of the opinion that these products of South Asian country are competitive in price as labour cost and other associated expenditures are on the lower side.

Zahid Aslam said that negotiations for import of Yarn and Fabric are under progress and expressed the determination of their successful conclusion.

He said that the PTEA delegation would again visit soon to Shanghai to further push these negotiations with the Chinese side.

He said that during their visit to Changzhou, the delegation was informed that the thirty percent of the total textile production was being exported to various parts of the world.

The negotiations with regard to purchase of power-looms for textile were also to continue in future, he said and expressed the hope of positive out come in this regard.

Zahid Aslam said that what he transpired from these meetings was that Chinese were willing to do business in close liaison with Pakistani businessmen.

Associated Press of Pakistan - Pakistan to export bed sheets to China; Chinese Textile delegation to visit Pakistan next year : PTE

 

[Introvert]

NBP, ICBC ink MoU to boost cooperation in Banking sector
BEIJING, Sept 7 (APP)- National Bank of Pakistan (NBP) and Industrial & Commercial Bank of China (ICBC) signed a MoU on bilateral cooperation in Dalian, on the sidelines of World Economic Forum Friday.

“Areas of mutual cooperation will focus on trade, finance, cash management and international payment, corporate lending and project financing, infrastructure financing, investment banking including cross border mergers and acquisition”, said a spokesman of NBP.

The two banks have also agreed to expand their business cooperation in third countries.

The MoU was signed by Mohammad Rafiq Bengali, SEVP, NBP and Mr. Wei Guoxiong, CRO, ICBC in the presence of Prime Miniter’s Adviser on Finance Dr. Salman Shah and Chairman, ICBC Jiang Jian. Pakistan’s ambassador to China Salman Bashir was also present at the occasion.

The spokesman of NBP commenting on the signing of MoU told APP from Dalian that it would be mutually beneficial for both the countries.

He said that it would also boost the Sino-Pak economic ties and added that especially it would be help boost Pakistan’s economy.

ICBC is China’s largest bank with total assets of more than USD 1.11 trillion. NBP is Pakistan’s largest and most profitable financial institution with 1,232 branches in the country and presence in 23 countries across the world.

Earlier, the ICBC’s Chairman in June 2007 visited Pakistan and held discussion with NBP’s President Ali Raza on mutual cooperation in the areas of banking and finance.

Associated Press of Pakistan - NBP, ICBC ink MoU to boost cooperation in Banking sector

 

[Introvert]

China Mobile to mix profit, responsibility in Pakistan
By Liu Baijia (China Daily)
Updated: 2007-09-07 09:06

China Mobile Communications Corp, the largest mobile operator in the world, aims to export its experience of balancing social responsibility with business growth to Pakistan, where it has just taken full control of Paktel.

Wang Jianzhou, chief executive officer (CEO) of China Mobile and chairman and CEO of its Hong Kong-listed arm China Mobile Ltd, said social responsibility should be a top priority for companies that aspire to become global giants.

In the past seven years, Beijing-headquartered China Mobile has more than tripled the number of its subscribers since its incorporation in 2000 and has become the largest telecom company in terms of subscribers and market capitalization.

"Global growth companies face better opportunities and more challenges, but they also have more social responsibilities," said Wang at the Inaugural Annual Meeting of the New Champions organized by the World Economic Forum in Dalian.

"They should take social responsibility into account when they start their businesses," added Wang, a mentor to the new champion companies, together with Intel Chairman Craig Barrett and Citibank NA Chairman, President and CEO William R Rhodes.

China Mobile has seen its subscribers from the rural regions of the country rise by almost 40 percent in the first half.

Driven by a strong increase in customer numbers and good momentum in its value-added services, China Mobile reported 26 percent year-on-year growth in the first half to 37.91 billion yuan (US$5 billion).

At the end of July, it had 338 million subscribers, two-thirds of the total mobile users in the world's most populous country.

The Chinese giant, which took over the fifth-largest Pakistani mobile operator Paktel in March and renamed it CMPak, will follow the same principle to strike a balance between profit and social responsibility in Pakistan.

"We always see ourselves as a local Pakistani company and are highly committed to the market there," said Wang.

His company has committed to invest US$800 million in two years to upgrade and expand the networks in Pakistan.

At the end of June, there were 63.15 million mobile subscribers in Pakistan, rising by 45 percent.

On September 2, CMPak won approval from the Pakistani government to secure a 15,000-sq-m plot to build a campus with integrated functions of research and development, training, and commercial use.

China Mobile to mix profit, responsibility in Pakistan

 

[Introvert]

Bahraini investor to set up Islamic bank

KARACHI: Commenting on the current development of the Islamic banking sector in Pakistan, Mr Ashar Nazim Managing Director, Islamic Capital, said that the introduction of new banks and financial investment in Pakistan is a very positive sign in the development of an Islamic financial market. These comments came in view of the news that a Bahraini investor, Al Salam Bank, is keen to establish operations in Pakistan.

Yousif Taqi, CEO - Al Salam Bank, has expressed his interest in making investments in Pakistan’s infrastructure, energy, power and real estate sectors. He further said that the current market share of Islamic banking in Pakistan is nearly 3 percent within five years, which is remarkable by any international standards. Comparing Pakistan to markets of Malaysia and Bahrain, it took them nearly ten years to reach the milestone. Currently there are 6 Islamic commercial banks and 13 Islamic banking windows of conventional banks operating in Pakistan, with more than 170 branches. staff report

Daily Times - Leading News Resource of Pakistan

 

[Introvert]

‘FTA can increase volume of Sino-Pak trade’

ISLAMABAD: The Free Trade Agreement (FTA) between Pakistan and China will help in increasing trade volume to the optimum level between the two countries.

Zhang Ye, Party Chairman and Vice Director General, Department of Foreign Trade and Economic Cooperation of Xinjiang province expressed these views while welcoming the business delegation of Islamabad Chamber of Commerce & Industry (ICCI) on Thursday, said a press release issued here.

He said that the Pakistani business delegation could explore enormous opportunities of trade in Xinxiang and appreciated their interest for visiting the Urumqi trade fair, which provided an excellent window of trade in many areas with Chinese entrepreneurs. China had a great interest for trade and investment in Pakistan and highlighted the importance of various projects, which were underway with collaboration of China in Pakistan. The chairman said that Pakistan and China friendship was deeper than oceans.

Zhang Ye said that both the countries should closely collaborate in many areas, which would further deepen their historic friendship. Discussing the development in Xinjiang province, he said that it had a great potential and Pakistan could further trade in the areas of common interest.

Nasir Khan, President of ICCI thanked Mr Zhang Ye for meeting the business delegation. He said that delegation had a great experience visiting the Urumqi fair, and their meetings with several Chinese entrepreneurs. staff report

Daily Times - Leading News Resource of Pakistan

 

[Neo]

BIT and ROZs in tribal areas: US lobbying firm's contract terminated ​

ISLAMABAD (September 07 2007): Pakistan has terminated a contract with a Washington-based lobbying firm Quinn Gillespie and Associate LLC for failing to secure enough support in the US administration for Bilateral Investment Treaty (BIT) and Reconstruction Opportunity Zones (RoZs) in troubled tribal areas, official sources told Business Recorder.

Sources said the government paid millions of dollars to the firm for obtaining reasonable support in the US administration against two tasks ie BIT and RoZs but the firm failed to meet the target. "Quinn and Gillespie obtained four or five letters from senators which Pakistani diplomats can do easily," the sources added.

Now, Pakistan has hired a Texas-based firm, Hunton and Williams LLP, to speedily complete the task, which is already too late. The firm practices in the areas of general civil trial practice in all state and federal courts, securities, probate, real estate, intellectual property, environmental, labour, employee benefits, antitrust and oil and gas law.

Asked how much the government is expected to pay to the new firm, the sources said it would also be in millions of dollars. Sources said that a team of Hunton and Williams met with the officials of ministries concerned, including the commerce ministry to devise a comprehensive strategy to secure enough support for BIT and RoZs.

"Our meeting with the team members was very encouraging as we discussed all the hurdles in details and new strategy," the sources maintained. They said some of the demands of US administration are difficult for Pakistan to accept and remove these hurdles, Pakistan decided to hire new lobbying firm in consultation with the Pakistan embassy in Washington.

They said the US is of the view that the investment made by the American companies in 90s should also be covered in the BIT whereas Pakistan argues that it should be treated separately as it was made before agreement.

Another demand made by the US was that any dispute between Pakistani and American companies would be dealt by the US courts, but Pakistan was of the view that the issues should be settled in accordance with international laws, the sources added.

However, Pakistan has agreed to pay compensation to the American companies in case of intellectual property rights piracy which was a longstanding demand of the US, besides tightening rules in the country, the sources maintained. According to sources, the US was also insisting on including a clause in the treaty that Pakistan's National Assembly, Senate, Executive and Judiciary would not take expropriate action against any American company.

Though, Pakistan has informed the Americans that these are sovereign institutions and they have no such track record, the issue is yet alive and may be discussed in Thursday's video conference, the sources added. Sources said that both parties have narrowed down differences on a few points while several other issues were yet to be resolved before reaching a formal agreement.

They said President Bush had announced that US establishment of RoZs during his last visit to Pakistan, but this had not been materialised yet due to one or the other reasons.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Pakistan's foreign exchange reserves cross $16 billion mark ​

KARACHI (September 07 2007): Liquid foreign reserves have crossed 16 billion-dollar mark, reaching historic level of 16.0789 billion dollars despite the outflow of some 133 million dollars in portfolio investment.

The central bank on Thursday issued the latest figures of liquid foreign reserves, which depicted an increase of 260.7 million dollars in overall reserves from 15.8182 billion dollars to 16.0789 billion dollars during the last week.

During the last week, foreign reserves, held by the central bank, have gone up by 289.9 million dollars to 13.804 billion dollars from 13.5141 billion dollars. The reserves, held by banks, show a decline of 29.2 million dollars during the last week, as it has reached 2.2749 billion dollars previously stood at 2.3041 billion dollars last week.

The historical achievement of this record level of foreign exchange reserves has been made possible by the healthy growth in external flows, including foreign direct investment (FDI), home remittances, said the central bank.

"It is a positive indicator. Despite a decline of 133 million dollars in portfolio investment during the 2008 fiscal 2008, the overall foreign reserves show an upsurge," economics experts said.

They said that foreign reserves, after reaching 16 billion dollars peak level, the country was able to make imports of six months without any assistance, as the country's overall imports would reach 32 billion dollars during the current fiscal.

"This increase in liquid foreign reserves may be due to a big inflow of foreign loan or remittances by Pakistanis abroad, but the reason of rise would be confirmed later in the current account," they added.

It may be mentioned here that at the end of the last fiscal, the country's foreign exchange reserve showed tremendous growth of 2.4768 billion dollars to historic level of over 15.6137 billion-dollar benchmark as compared to 13.1369 billion dollars during the 2005-06 fiscal year.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Pakistan and Sri Lanka eye $1 billion trade ​

COLOMBO (September 07 2007): Traders in both Pakistan and Sri Lanka are looking forward to adopt aggressive approach in achieving the potential bilateral trade capacity that is over one billion dollar. While assessments and thorough research show that the existing Pakistan-Sri Lanka bilateral trade capacity is highly encouraging.

While present trading brings about 250 million dollars only 25 percent of the capacity. Muhemmed Aejaz, Commercial Counsellor of the High Commission for Pakistan, said in Colombo, whileaddressing the gathering at the opening ceremony of a mini-exhibition of Pakistani products, held here at a hotel.

The exhibition coincides with the visit of a 15-member Pakistani trade delegation to Sri Lanka, who is currently in Colombo. In the past one year trade between the two countries included some "extraordinary activities," said the Commercial Counselor.

Since January 2007, the two trade delegations from Sri Lanka have visited Pakistan. Sixty-three Sri Lankan businessmen had attended 'Expo Pakistan 2007' in March and 30 companies had exhibited Sri Lankan products at the 'My Karachi' held in June.

The visit was important since it was the first major return visit by the Pakistani business community, he said. The exhibition was organised to introduce the products of the delegation to interested counterparts in the Sri Lankan market.

The delegation represents 15 novel fields of trade, breaking traditional approach of trading a limited number of commodities such as rice, potato and textiles from Pakistan and tea, rubber and beetle leaves from Sri Lanka.

The delegation is led by Arshad Alam former, vice president of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI), representing the leather industry in Pakistan. "The market has high potential. It is time that we convert the good political relations between the two countries to good economic relations," Alam told APP special correspondent Vimukthi Femando.

Increased per-capita income, expanding middle class population, increasing consumption and consumer base in Sri Lanka were some favourable conditions in the Lankan market, which appealed to the businessmen in Pakistan, he said. Previously, trade had been between the two port cities, Karachi and Colombo.

However, the present delegation, representing diversified products as well as diversified locations in Pakistan, could be considered a "milestone, the first step in a million mile journey," he noted.

Alam expects that with the introductions by the delegation, trade between the two countries will meet up the one billion-dollar target within five years. Shakeel Azam, representing Pak Cutlery Consortium from Wazirabad, said that he was happy with the response he received in Sri Lanka. "I have already received nine major inquiries and have decided to tie up with a major chain store in Sri Lanka," he said.

Shahid Ahmed from Karachi's FD&C Equipment (Pvt) Ltd, presenting machinery used in pharmaceutical industry, was hopeful about the potential market in the country. "Sri Lanka at present imports most of the pharmaceuticals to meet the country's need. So, why not take the opportunity to manufacture own drugs/medication. It can also become a major manufacturing country," he said.

The delegation that includes prominent Pakistani traders had discussions with Manel De Silva, Director General of Commerce, and a team of officials from the Department of Commerce on Monday.

They are also scheduled to meet with the members of the Ceylon Chamber of Commerce, National Chamber of Commerce, National Chamber of Industries, and Chamber of Exporters. It is also scheduled to visit Kandy, Capital City of the central province situated 112 kilometers Northeast of Colombo on Thursday to hold discussions with the Central Province Chamber of Commerce and provincial trading associations.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Reforms plan enables Pakistan to bring down poverty: Shaukat ​

ISLAMABAD (September 07 2007): Prime Minister, Shaukat Aziz, on Thursday said reforms programme has enabled Pakistan become economically strong to improve the living standard of people, besides bringing down poverty.

Shaukat Aziz expressed these views at a function held at the Prime Minister Secretariat for laying the foundation stone of National Press Club, Islamabad.

He said the government fought well on many fronts to make Pakistan viable and strong politically and economically. He added that the government took all possible measures to make Pakistan an attraction for trade and investment which to him were key to economic progress and prosperity.

However, Pakistan was yet to overcome many difficulties and challenges on different fronts.

Shaukat Aziz dispelled the impression that the government and media fall apart after March 9 events and said it was a wrong perception. He said the government believes in a free media culture and award of licenses for TV channels in a large number during the last few years was its practical proof. He said media men should focus on quality journalism to become professionals of international repute. He announced Rs 40 million grant for National Press Club Islamabad. The Prime minister also announced free of cost medical facility for journalists and their families.

Information minister, Muhammad Ali Durrani said the government was taking all possible steps to strengthen media and improve working conditions of the journalists. He said the government was working on a plan to bring the owners of the newspapers and working journalists at an understanding on 7th wage board award.

He added that setting up of a media university in Islamabad was under consideration to provide better opportunities to the working journalists for quality journalism.

Earlier, Islamabad - Rawalpindi Press Club president Mushtaq Minhas welcomed the Prime Minister for the event and termed laying of foundation stone for National Press Club Islamabad as a milestone for providing better facilities to the working journalists. He appreciated the government for fulfilling its promise to establish the National Press Club in Islamabad of international standard. He demanded implementation of 7th wage board award as well as constitution of 8th wage board award which was due for the last two years. He said better economic conditions could help the journalists improve their working skills to play their role more effectively.

Islamabad - Rawalpindi Press Club Secretary General Afzal Butt thanked the Prime Minister and Information minister's team for taking special interest in completing homework for National Press Club Islamabad.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

World Bank group extends $6.9 billion support to South Asia in fiscal year 2007 ​

LAHORE (September 07 2007): The World Bank Group extended loans, credits, grants, equity investments, and guarantees totalling nearly $6.9 billion to South Asia in fiscal 2007. The World Bank said here on Thursday that this was an increase of $2.3 billion over the previous year, demonstrating the institution's continuing role in fighting poverty.

South Asian countries look for ways to tackle their social challenges even while most of their economies grew aggressively. The eight countries of South Asia are using World Bank Group support in more than 78 projects designed to overcome poverty and enhance growth; for example, by improving education and health services, promoting private sector development, building infrastructure, and strengthening governance and institutions.

Contributing to this increase was: $1.6 billion from the International Bank for Reconstruction and Development (IBRD), which provides financing, risk management products, and other financial services; $4.03 billion from the International Development Association (IDA), which provides interest-free loans and grants; $1.18 billion from the International Finance Corporation (IFC), which makes equity investments, and provides loans, guarantees and advisory services to private sector business in developing countries; and $76 million from the Multilateral Investment Guarantee Investment Agency (Miga), the Group's political risk insurance agency.

Globally, the World Bank Group committed $34.3 billion in fiscal 2007, up $2.7 billion (7.8 percent) from fiscal 2006. India was by far the largest borrower from IBRD and IDA, accounting for $3.75 billion, or 15 percent of total lending from these two institutions. The World Bank's programme in India focuses on providing basic services such as access to clean water and education, improving infrastructure for rural areas, and employment. The increase also reflects $700 million in lending to the health sector to India, which was carried over from the previous year. Pakistan was the World Bank's seventh largest borrower with $985 million in loans and credits.

Nearly, 60 percent of the World Bank Group's commitments to South Asia came from the IDA and more than two-thirds of the lending financed projects in the areas of rural development and human development such as health, education, nutrition and HIV/AIDS.

Many of the Bank's projects in the last fiscal year supported existing programmes that are delivering results. For instance, in Afghanistan the Bank approved a $120 million IDA grant for the Second National Solidarity Programme, a community-led reconstruction and rural infrastructure initiative that has reached about 14 million rural people - 74 percent of Afghanistan's rural population - since its inception in 2002.

Looking ahead, the Bank would focus on cross-cutting reforms such as governance and fiscal management, and continue addressing deficiencies in the region's investment climate, such as weak infrastructure, red tape, and corruption. It would also deepen its engagement in states where poverty is increasingly concentrated, such as Orisa and Bihar in India and Sindh in Pakistan.

IBRD lending in the past year focused on helping South Asia close its infrastructure gap with road and irrigation projects. Looking ahead, the Bank would broaden its commitment to infrastructure with the first hydro project in a generation up for consideration early in the fiscal year just started.

IFC's investment commitments in the South Asia region reached $1.07 billion for 30 projects in FY07, and it mobilised an additional $102 million through syndications. Its portfolio spreads across eight sectors in Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka. The financial and manufacturing sectors are the largest with infrastructure displaying the most rapid growth.

Three quarters of $2.6 billion of the disbursed and outstanding regional portfolio is in India, with Bangladesh at $147 million, the second largest. Private sector projects worth $3 billion were supported as a result of IFC's assistance to the Indian corporate sector.

IFC doubled its committed portfolio in India in the infrastructure sector to $600 million. Investments ranged from natural gas to wind power and from port services to a fund for developing public-private projects in infrastructure sector.

Also active in the region is Miga, which provided $76.4 million in insurance guarantees in support of three investments and undertook two technical assistance projects in the region, including support for the new Bangladesh Investment Climate Facility. To date, Miga has issued $640 million in insurance guarantees for foreign direct investments in South Asia.

In the past year, Afghanistan received a major cash injection with a Miga-backed investment in a state-of-the-art telecommunication network. The $85 million project represents roughly a third of total flows of foreign direct investment into the country from March 2006-07 (the Afghan calendar year). This is the fourth investment guaranteed by Miga in Afghanistan.

Equally important is the World Bank's knowledge assistance to South Asia. The Bank delivered over 90 analytical and advisory activities, ranging from a detailed exposé of Afghanistan's drug economy to an analysis of Sri Lanka's plantation sector to the economic impact of HIV/AIDS in India.

This year also saw earlier Bank analytical work having policy impact. Estimates of teacher absenteeism in India, for example, have contributed to a shift in the focus of India's major primary education program towards improved education quality.

In response to the Bank's Doing Business report, the Indian government set up a Committee of Secretaries in November 2006. This Committee has directed that action is taken to reduce the time and cost of doing business in the country.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Infrastructure main obstacle to attracting FDI: OICCI survey ​

Friday, September 07, 2007

KARACHI: Pakistan’s role in the global war against terror has heightened domestic security risks.

In a presentation on Thursday, the Overseas Investors Chamber of Commerce and Industry (OICCI) highlighted that 69 per cent of its members found the internal political situation to be poor while 71 per cent of them were concerned about the law and order situation.

“A growing domestic economy and consistent and business-friendly policies have contributed to an overall favourable outlook for Pakistan as an investment destination. However, infrastructure is the key constraint in attracting FDI,” said Zubyr Soomro, the OICCI President.

Announcing the results of the first-ever OICCI’s annual survey on the perception of its members doing business in Pakistan, he said with FDI of over $5 billion last year, Pakistan’s economy had achieved critical mass yet to sustain and increase this level of investment required continuity of the economic reforms process and current government policies.

Nevertheless, 75 per cent of those questioned said the business climate was attractive and had a positive outlook towards their trading partners. Most OICCI members are satisfied with the performance of the Ministry of Commerce, Ministry of Finance and Ministry of Industry and Production; however, the Ministry of Interior needs improvement according to 41 per cent of them.

Among the autonomous bodies the State Bank of Pakistan and the Federal Board of Revenue received the highest percentage of praise from the foreign members.

A major concern is the state of infrastructure facilities available in the country with 89 per cent being highly dissatisfied with the availability electricity and 51 per cent being dissatisfied with water availability in Pakistan. Telecommunications ranked as the most promising sector with over 70 per cent considering it satisfactory.

The foreign business community considers the law and order situation, infrastructure and political uncertainty to be the most significant deterrents to business as these factors received very high ratings of 6.5, 5.3 and 5.7, respectively, out of eight points.

OICCI has 168 members representing all major sectors of the economy. The annual survey conducted by KPMG shows that the OICCI members contribute more than 14 per cent of GNP of Pakistan and nearly 32 per cent of GDP of the manufacturing sector. Between them they contribute 33 per cent of the total tax revenue of the government of Pakistan and directly employ around 100,000 people.

Infrastructure main obstacle to attracting FDI: OICCI survey

 

[Neo]

IMF team due next week to discuss Pak economic health ​

Friday, September 07, 2007

ISLAMABAD: The International Monetary Fund (IMF) is all set to initiate technical and policy level talks on Pakistan economy with government of Pakistan under Article IV consultations from 10 to 20 September, a senior government official at Ministry of Finance told The News.

A four-member delegation headed by Di Tata, a senior official of the Fund will arrive n Pakistan to hold meeting under Article IV consultations. “IMF has the mandate to look into economic and financial health of its member countries once in a year.”

The official said that IMF delegation will be holding the technical talks from Sept 10 to 15 with top officials of Federal Board of Revenue, Budget Wing in Finance Ministry, Economic Affairs Division, State Bank, Privatisation Commission, Textile Ministry, Ministry of Food, Agriculture and Livestock and Ministry of Commerce.

However, IMF and the government of Pakistan will hold policy level talks on September 16-17 and have wrap up meeting on September 18-19. Pakistan has already said good-bye to the IMF after completion of the Poverty Reduction and Growth Facility (PRGF) program three years ago.

“Now our economic indicators are very strong even amid the uncertainty the country is facing in the wake of forthcoming election for President of Pakistan and then general elections,” he said.

It is pertinent to mention that the Fund expressed concern over hike in inflation, growing trade deficit and current account deficit Pakistan facing in the last couple of years. On return to the headquarters, the mission prepares a report, which forms the basis for discussions by the Executive Board. At the conclusion of the discussions, the managing director, as chairman of the board, summarises the views of executive directors, and this summary is sent to the country’s authorities.

IMF team due next week to discuss Pak economic health

 

[Neo]

Pakistan borrows $985m from WB in FY07​

Friday, September 07, 2007

ISLAMABAD: Pakistan is the World Bank’s seventh largest borrower with US$985 million in loans and credits, out of loans, credits, grants, equity investments and guarantees amounting to US$6.9 billion the Bank extended to South Asia in fiscal 2007.

The World Bank will also deepen its engagement in states where poverty is increasingly concentrated, such as Sindh in Pakistan. This is an increase of US$2.3 billion over the previous year, demonstrating the institution continuing role in fighting poverty as South Asian countries look for ways to tackle their social challenges even while most of their economies grew aggressively, says a press release issued from Washington, DC.

The World Bank will also increase its activities in Orissa and Bihar in India to fight against poverty menace.

The eight countries of South Asia are using World Bank Group support in more than 78 projects designed to overcome poverty and enhance growth for example, by improving education and health services, promoting private sector development, building infrastructure, and strengthening governance and institutions.

Contributing to this increase was: US$1.6 billion from the International Bank for Reconstruction and Development (IBRD), which provides financing, risk management products, and other financial services; US$4.03 billion from the International Development Association (IDA), which provides interest-free loan and grants; US$1.18 billion from the International Finance Corporation (IFC), which makes equity investments, and provides loans, guarantees and advisory services to private-sector business in developing countries; and US$76 million from the Multilateral Investment Guarantee Investment Agency (MIGA), the groups political risk insurance agency.

“South Asia is home to the largest number of people in the world living below one dollar a day, so the agenda for poverty alleviation in the region remains very large,” said Praful Patel, World Bank Vice President for South Asia.

The lending numbers from the IDA and IBRD in Fiscal Year 2007 are in line with the scaling up strategy we developed for the region three years ago Globally, the World Bank Group committed US US$34.3 billion in fiscal year 2007, up US$2.7 billion (7.8 percent) from fiscal year 2006.

India was by far the largest borrower from IBRD and IDA, accounting for US$3.75 billion, or 15 percent of total lending from these two institutions.

The World Bank’s program in India focuses on providing basic services such as access to clean water and education, improving infrastructure for rural areas, and employment.

The increase also reflects US$700 million in lending to the health sector to India, which was carried over from the previous year.

Pakistan was the Bank’s seventh largest borrower with US$985 million in loans and credits.

Nearly 60 percent of the World Bank Group’s commitments to South Asia came from IDA, and more than two-thirds of this lending financed projects in the areas of rural development and human development such as health, education, nutrition, and HIV/AIDS.

“There is a huge demand for IDA resources in South Asia and there is a huge prospect for making a real impact on the ground to reduce poverty,” said Patel.

These types of programs would not be possible without IDA funding.

IDA leverages government programs, enabling them to innovate and scale up.

Many of the Bank’s projects in the last fiscal year supported existing programs that are delivering results. For instance, in Afghanistan the Bank approved a US$120 million IDA grant for the Second National Solidarity Program, a community-led reconstruction and rural infrastructure initiative that has reached about 14 million rural people 74 percent of Afghanistan’s rural population since its inception in 2002.

Looking ahead, the Bank will focus on cross-cutting reforms such as governance and fiscal management, and continue addressing deficiencies in the region’s investment climate, such as weak infrastructure, red tape, and corruption.

IBRD lending in the past year focused on helping South Asia close its infrastructure gap with road and irrigation projects.

Looking ahead, the Bank will broaden its commitment to infrastructure with the first hydro project in a generation up for consideration early in the fiscal year just started.

IFC’s investment commitments in the South Asia region reached US$1.07 billion for 30 projects in FY07, and it mobilized an additional US$102 million through syndications.

Its portfolio spreads across eight sectors in Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka.

The financial and manufacturing sectors are the largest with infrastructure displaying the most rapid growth.

Three quarters of the $2.6 billion of the disbursed and outstanding regional portfolio is in India, with Bangladesh at $147 million, the second largest.

Private sector projects worth US$3 billion were supported as a result of IFC’s assistance to the Indian corporate sector.

IFC doubled its committed portfolio in India in the infrastructure sector, to US$600 million.

Investments ranged from natural gas to wind power and from port services to a fund for developing public-private projects in infrastructure sector.

“IFC’s strategic priorities in South Asia include addressing constraints in infrastructure, health, and education,” said Paolo M Martelli, IFC Regional Director.

“IFC supports local mid-tier manufacturing companies in agribusiness, engineering, automotive components and other sectors and helps them become globally competitive.

We work towards local financial market development through institution-building and promoting innovative financial products,” Martelli said.

“Investment climate improvement programs and small and medium enterprise development are the primary areas of focus for our Advisory Services in the region, “ he said.

Also active in the region is MIGA, which provided US$76.4 million in insurance guarantees in support of three investments and undertook two technical assistance projects in the region, including support for the new Bangladesh Investment Climate Facility.

To date, MIGA has issued US$640 million in insurance guarantees for foreign direct investments in South Asia.

In the past year, Afghanistan received a major cash injection with a MIGA-backed investment in a state-of-the-art telecommunications network.

The US$85 million project represents roughly a third of total flows of foreign direct investment into the country from March 2006-2007 (the Afghan calendar year).

This is the fourth investment guaranteed by MIGA in Afghanistan.

“Foreign direct investment can have a strong, positive impact on rebuilding conflict-affected countries, bringing much-needed private capital and jobs, developing local skills, and stimulating spin-off industries,” said MIGA’s Executive Vice President, Yukiko Omura.

The South Asia Region has been acknowledged as a leader in impact evaluations to better understand what works and what doesn’t work, so governments and the Bank can decide what should be scaled up and what should be scaled down, a said Shanta Devarajan, World Bank Chief Economist for South Asia.

This year also saw earlier Bank analytical work having policy impact.

Estimates of teacher absenteeism in India, for example, have contributed to a shift in the focus of India’s major primary education program towards improved education quality.

In response to the Bank’s Doing Business report, the Indian government set up a Committee of Secretaries in November 2006.

This Committee has directed that action is taken to reduce the time and cost of doing business in the country.

Pakistan borrows $985m from WB in FY07

 

[Neo]

Textile ministry plans to regain share in world market​

ISLAMABAD: The ministry of textile industry has decided to develop perspective textile and clothing industry plan 2007-2015, to regain the sector’s lost share in the world market.

The perspective plan would consist of two phases, Phase-I would cover period of 2007-2011 to meet the challenges of short and medium term and phase-II would be 2011 to 2015 for realising the medium and long term objectives, a senior government official told Daily Times on Friday.

Perspective plan would be based on recommendations, which would be available through a study to be conducted by M/s Gherzi Textile Organisation, Switzerland. Terms of reference (TOR) of the study include, drawing up of a perspective plan for Pakistan textile and clothing industry up to the year 2015 in two phases, phase-I (2007 to 2010) and phase-II (2011 to 2015). It also includes proposing measures for skill development in the different sectors of the textile and clothing industry, especially in textile processing, garments and home textile.

To achieve these objectives the consultant firm has to identify the market issues that Pakistani exporters need to address and make a SWOT analysis of the industry. Address the need to increase the competitiveness of Pakistan’s textile and clothing industry keeping in view in mind the strategies of China, India, Bangladesh, Sri Lanka and other countries, to increase their shares of global market. Update and revise Textile Vision 2005 to strengthen the value chain in textile and clothing. Recovery of labor related and other federal, provincial and local government levies from textile units as “One Window” operations. Review the taxation policies and the rationalisation of existing taxes and duties.

This phase-I of the study would cost $60,000 and phase-II of the study will follow immediately after phase-I with a separate budget. The objectives of the Phase-II of the consultancy study would include: to identify the export industry targets for the period 2011 to 2015 for medium to long term and the required strategic action plan to realise these targets. In this regard issues, which would be examined in detail, would include, Review the textile value chain to identify the needed Balancing, modernising, Restructuring and Expansion (BMRE) investments. Defining the role of banks financial institutions in financing BMRE investments together with the levels of interest rates that may preclude investment in the critical sector. The need for fashion and design inputs to assist the industry moves to higher value added consumer products. Review the numbers needed in the industry of skilled management and production operatives at all levels for the developing industry and types of skills required. Review the higher education (universities, technological institutes) and vocational skill training schools to identify their capacities, to determine the challenges needed to serve the developing industry with the requisite skills. Other issues would also be added in these TORs to meet the needs of a more challenging industry to meet the global markets highly competitive demands.

The textile ministry has been allocated the responsibility for formulating Textile Industry Policy. In this regard the ministry has already undertaken various steps including studies through foreign consultants to finalise the said policy. M/s Gherzi Textile Organisation, Switzerland has already completed two important studies on “benchmarking the production costs of certain textile products in Pakistan, China, India, Indonesia, Bangladesh, Egypt and Vietnam”. “A comprehensive study of incentives for promotion of textile industry of Pakistan, India, China, Sri Lanka, and Bangladesh.

In addition, M/s Warner International has undertaken to do the study “Productivity Benchmarking in Textile and Garment Industry.” All Pakistan Textile Mills Association (APTMA) is coordinating this study. Ten textile sectors including spinning, weaving, processing, woven garments, towels, ginning, bed wear, knitting, denim, and hosiery would be covered under this study, so far study on spinning and weaving sector have been completed.

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