Pakistan Economy - News & Updates - Archive

[Neo]

'Improved energy efficiency to ensure economic stability'
ISLAMABAD (March 29 2006): The improvement in energy efficiency will help safeguard energy security and stable environment of the economy, while effective mechanism, saving and development of energy corridors would improve the overall energy security of the country.

This was the gist of a lecture by Private Power and Infrastructure Board (PPIB) Managing Director Khalid I Rahman on the 'Role and prospects of hydel and thermal power in energy security' at Pakistan Engineering Council Auditorium here on Tuesday.

Pakistan uses 31 units of energy to produce one dollar of Gross Domestic Product (GDP) while Bangladesh consumes 13 units for one dollar of GDP, and India 27 units for it, he said. "We have to increase it to the level of developed nations, which is below 10 units", the PPIB chief added.

Comparing the prices of natural gas and electric power with other countries of the region, Rahman said that they are relatively low and should be rationalised to attract more investors into the sector.

Short-term projection of energy is 79.39 MTOE till 2010 in which oil has 20.69, natural gas of 38.99, coal 7.16, hydro 11.03, renewable 0.84 and nuclear 0.69 against the production of 50.8 MTOE in 2004, he said. When compared with the regional countries, Pakistan, like India and Bangladesh, is around the same line of per capita GDP but it fell very short from per capita GDP of China (5000) and Malaysia (9000).

Pakistan, unlike regional countries, has more dependence on imports, as it has 24 percent import dependence while China had only 1 percent and Malaysia has exportable energy, he added.

Similarly, power generation plan for 2030 would be 162590 MW in which 8800 would be nuclear, 32660 hydel, 19910 coal, 9700 renewable, 7760 oil and 83760 gas.

In response to 2002 power policy, 45 projects with capacity of 11915 MW and investment of $11,203 million would be operational before 2015, he said.

 

[Neo]

Pakistan attracts US$ 1 billion in petroleum sector: Jadoon
Wednesday March 29, 2006

Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon has said that Pakistan’s petroleum sector attracted over US$ 1 billion direct and indirect investment in last few years.

ANKARA, March 29 (Online): Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon has said that Pakistan’s petroleum sector attracted over US$ 1 billion direct and indirect investment in last few years owing to continuation of policies, deregulation and restructuring measure.
He said this while addressing a two-day Caspian and Black Sea Oil and Gas Summit 2006 here on Tuesday. The conference was organized by the Turkish Ministry of Petroleum and being attended by the Oil Ministers and senior officials from Russia, Iran, India, Pakistan, Afghanistan, Kazakhstan, Azerbaijan, Georgia and Ukraine.

The Minister said that Pakistan would become an energy hub in the region due to its strategic location and would serve as a corridor for the international supply routes of energy to the landlocked Central Asian States for transporting their oil and gas to the world markets.

Jadoon said that Pakistan has taken some bold steps during the last one year, which would conceivably bring about a major shift in the approach of regional countries to address the issues of energy supply on a mutually assured benefits basis.

He invited the participants to visit Pakistan and see for yourself the immense opportunities available in the energy sector adding that "our government and oil and gas companies will fully facilitate investment and joint ventures.

The minister said that the government has accorded top priority to the speedy development of the oil and gas sector and all out efforts were being made to exploit the indigenous hydrocarbon resources in order to meet the growing energy need of the country.

He said that during the last few years, 1.5 billion cubic feet gas per day were added in the transmission system from the newly discovered fields.

The minister said that to bridge the energy shortfall after 2010, the government was judiciously working on Iran, Turkmenistan, and Qatar Gas Pipeline Projects besides looking of LNG fuel.

 

[Neo]

Musharraf asks exporters to focus on heavy industry
KARACHI (March 30 2006): President General Pervez Musharraf on Wednesday said Pakistan is hoping to achieve $18 billion of exports this year and the target for next year would be 20 billion dollars.

Inaugurating the Expo Pakistan-2006, he pointed out that in the first seven months of the current fiscal year from July to January, we have already hit $9.3 billion in terms of exports.

"I am very reasonably sure that if we continue like this we will Insha-Allah cross 18 billion dollars," Musharraf remarked and hoped that next year we ought to be crossing $20 billion.

He was of the view that exports amounting to 20 billion dollars were not even enough and we need to target much higher.

However, the President said we cannot target much higher unless we strategize and think of innovative methods of doing that. He stressed that we must go for market access through bilateral arrangements and we are going for preferential trade agreements and free trade agreements with many countries and within South Asia.

He called upon exporters to increase exports in heavy industry and engineering sector as they contribute 61 percent of the world exports.

Musharraf said we have also gone in for an early harvest arrangement with China and that this is the trend that we must pursue on a bilateral level to give a boost to the country's exports.

He also stressed that we would also have to diversify our products. The President pointed out that in the past we had bogged down in exports of agricultural products and textile, which form our backbone.

Musharraf said our industry is growing by leaps and bounds and in the year 2004 our industrial growth was 16.2 percent and in 2005 it was 14.6 percent and this year again we will hit double figures.

The President also emphasised the need for diversification of the markets. In the past we were bogged down in looking towards West only, which means Europe and the United States. He called for looking to the new markets in Africa, East Europe, South America, South East Asia and China, which is our friend for more than 50 years. "We never concentrated on trading with these countries."

He also highlighted the significance of value-addition in our exports. The President pointed out that Pakistan is the 5th largest milk producer in the world but we do not produce any cheese, butter or milk powder or yoghurt for export. "We must go for a white revolution which we are trying to bring about in the country today and become exporter in the dairy products", he added.

Musharraf also pointed out that the revenue collection in the country is expected to increase to Rs 850 billion this year as compared to 302 billion in the year 1999.

The President o emphasised for drawing investment to Pakistan and was glad that the country's economy is in upsurge with a GDP growth of 8.4 percent last year and targeting over 7 percent this year.

He was very sure that the country would sustain growth of above 7 percent in the coming five years and that the economy would remain in upsurge in the coming years. Musharraf stressed that this is an ideal time for an investor to come and invest in Pakistan because the demand-supply gap is vast.

He pointed out that there are about 700 foreign firms in Pakistan today and they are earning profit between 20 to 60 percent with some making more than 80 percent profit.

The President said it is a win-win situation for them as well as for Pakistan.

Musharraf also pointed out that Pakistan has a great advantage because of its strategic location. He said a tremendous amount of reconstruction activity is going on in Afghanistan and $12.5 billion have been promised for reconstruction there. He said Pakistan's trade with Afghanistan has increased beyond dollars one billion. He also stated that China is developing its western region and pumping in 120 billion dollars. The President pointed out that if we see this whole region, no interaction is possible without Pakistan. He said if India wants to have oil or gas it has to be through Pakistan, whether they want to get it through Iran, Qatar or Turkmenistan, Pakistan happens to be in the way.

Musharraf pointed out that the government is creating an investment-friendly environment in the country by amending and modifying rules and regulations and a lot has been done on this count.

He said today every sector of Pakistan economy is open to foreign investors and 100 percent equity is allowed to any foreign investor in Pakistan.

Musharraf said we are providing a level playing field to all the foreign investors like we have given to the local investors. He pointed out that the security of investment is guaranteed through law.

The President said that investment in Pakistan has risen by 300 percent this year. We are targeting 2.5 billion to 3 billion dollars and in this case the increase would be 1000 percent. He urged the representatives of 57 countries who were present at the inaugural session of Expo Pakistan to look at Pakistan,

The President said it was unfortunate that there are travel advisories against this country and that nothing could be farther from the truth.

He pointed out that Pakistan is a moderate, enlightened and progressive society. "The extremists are a fringe minority and we will suppress and control them."

Commerce Minister Humayun Akhtar said President Musharraf is pursuing a very aggressive trade policy that is earning great benefits for the country.

He said as a result of this policy we are holding talks with various countries for trade agreements.

Humayun said, "We would continue to make diplomatic efforts in the area of trade so that maximum foreign investment is ensured in the country." He said the slogan is "Pakistan is out there for trade".

The minister also called upon various countries to give Pakistan the market access and a level playing field in their markets.

Humayun said, "We want that our entrepreneurs could become competitors internationally with quality products and competitive prices for which the government would provide all incentives to them." The minister said foreign direct investment (FDI) is pouring into the country in a big way and there is no such example in the past.

He also thanked Chairman Export Promotion Bureau Tariq Ikram, Vice Chairman Zafar Mahmood, members of the Steering Committee and EPB staff for their untiring efforts for holding such a mega event in a successful manner. Earlier, in his speech Tariq Ikram said as many as 1000 delegates representing 57 countries and 350 exhibitors of goods and services from within the country are taking part in the Expo-2006 which itself speaks of a successful story.

He said the event is being held for the second consecutive year here and this time more and more investors are taking part.

This exhibition, the EPB chairman said, would help us in holding negotiations with large business houses whose senior executive otherwise were not easy to meet.

He said, "We are also holding a conference during the exhibition to examine the responses we got from our former exhibitors and visitors, the rules and regulations, incentives for the investors, etc.

 

[Neo]

Account gap to be bridge with privatisation and FDIs
HONG KONG (March 30 2006): Pakistan is targeting up to $2.5 billion in asset sales and an equal amount of foreign direct investment each year to help bridge its growing current account deficit as the economy gathers pace, a government official said on Wednesday.

The economy, projected to expand by 6.7 percent in the current financial year up to June, and by 7.0 percent next year, has seen an investment boom after sanctions were lifted and debts rescheduled as reward for joining the US-led war on terrorism.

In 2005, portfolio inflows were estimated around $450 million, compared with an annual average of $150 million in previous three years, as Pakistan's stocks soared 51 percent. This year, they are up 21 percent.

"We have tight deadlines for privatisation. For example, before the fiscal year is out, we should have road shows for Pakistan Steel Mills, gas companies, Pakistan State Oil and OGDC GDR," Salman Shah, advisor to prime minister on finance, told Reuters. He said the government was aiming to raise $2 billion to $2.5 billion by selling state-owned assets and seeking to attract a similar amount via foreign direct investments in oil and gas, power, construction, real estate and textile sectors.

Analysts say textiles, the mainstay of Pakistan's economy, are expected to see a stiff challenge from growing Chinese competition since the abolition of textile quotas, but Shah argues that Pakistan enjoys an advantage over its rivals.

"We have a real surplus in textiles. Domestic demand in China and India is so high that it may not be sustainable for them to be major players in the global textiles business." Shah, who was in Hong Kong to address a Credit Suisse investment conference, said he was not perturbed by the decline in foreign exchange reserves, which have fallen steadily since a record high in April last year.

"If some of your reserves go down because you are financing expansion in the capacity of the economy, it is not a big deal as long as there are sufficient reserves to cover imports and the traditional indicators," Shah said.

Routine debt payments and the rising import bill have seen reserves fall by over a tenth to $11.404 billion since last April.

Foreign exchange reserve growth would be sustained by healthy expatriate remittances, which are supported by a boom in the Gulf economies and the shift of flows to formal from informal channels, he added.

He said annual remittances would stabilise at the current $4.5 billion.

BENCHMARK FOR INVESTORS: A recent international debt offering by Pakistan would help guide investment flows into the economy, Shah said. Pakistan sold $800 million in a dual-tranche sovereign bond, its third foray into the international debt market since 2004 which attracted more than $2 billion in orders.

"This has helped in establishing a benchmark for long-term investments in Pakistan ... it will help FDI, portfolio investments and in our ability to make major flotations of equity in global markets," he said. But he added that there were no plans for debt-swapping, a popular tool adopted by emerging market borrowers in recent months, despite the popularity of the bond issue.

"Out of the $34 billion of external debt only $2 billion is commercial, (the) rest is inexpensive long term debt. We don't have any major expensive debt," he said, adding that regular visits to the global debt markets would ensure an international yield curve.

 

[Neo]

Pak-China bus service from June
Thursday, March 30, 2006



ISLAMABAD: Pakistan will launch from June a bus service with China which is keen to use the South Asian country as a transit facility to gain access to Central Asian markets and to help Beijing develop alternative energy sources.

A tourism ministry spokesman said the decision to start the bus service between Pakistan's Northern Areas and China's Xinjiang region was taken at a meeting held in Urumqi on March 20-21.

He said a formal agreement was signed Wednesday in China and both sides have agreed to operate one bus each daily from June 1 via the Sust and Tashkorgan border areas of the two countries.

The spokesman said another bus service would operate between Kashghar and Gilgit via the same route thrice a week.

The bus service to China follows closely on heels with bus services with three of its other neighbours - India, Iran and Afghanistan.

Foreign office officials said the two countries would start a regular goods transportation service from May 1 via the Khunjerab pass on Pakistan's northern border with China.

Both sides would issue 3,000 permits to registered goods transporters and each permit would be valid for one round trip between designated points. The number of permits could be gradually increased to keep up with the transporters' demand.

Transporters in Pakistan have termed the protocol an important step for streamlining the existing road network between the countries.

'It would promote commercial links and strengthen people-to-people contacts between the two countries,' Abdur Rehman, who imports toys from China, said.

 

[Neo]

Six world-class engineering universities by 2008
KARACHI (March 31 2006): President General Pervez Musharraf on Thursday said that six world-class engineering universities will start functioning in Pakistan by 2008. Pakistan, he said, has embarked upon a programme to enhance the quality of its human resource.

"For this purpose, we have planned to establish six engineering universities in Pakistan with the help of Sweden, France, Germany, Netherlands and Austria," he added.

He was speaking at the groundbreaking ceremony of $130 million state-of-the-art steel making Tuwairqi Steel Mills (TSM) over an area of 220 acres at Port Qasim. The production capacity of the TSM can be expanded to 1.5 million tonnes and subsequently to 3 million tonnes in future.

Sindh Governor Dr Ishratul Ibad, Chief Minister Dr Arbab Rahim, Industries and Production Minister Jahangir Khan Tareen, Saudi Arabian Ambassador in Pakistan Ali S. Awadh Asseri and senior civil and military officials and members of the diplomatic corps were also present on the occasion.

He said that the disciplines of these universities will be heavy industry and engineering sector with a view to enhance expertise of our young engineers. "For enhancing expertise of our technicians, we have set up a separate body in the form of Technical Education and Vocational Training Authority (Tevta)," he said, adding that the body is headed by Saleem Altaf.

Referring to the training programme of Al-Tuwairqi Group for Pakistani engineers and technicians, he said that was the real transfer of technology and enhancing the quality of manpower in Pakistan.

He said that technical education was taken away from the Education Ministry and Tevta would look after it, which would ensure quality training of technicians. The government is also looking into the present and future needs of Pakistani industry and these universities would design disciplines according to these requirements.

"This is the spectrum how we want to take our youths forward. At the end of the day it is human resource development which will propel us forward," he said.

The president said that Pakistan would gradually shift its focus from agriculture and textile to heavy industry and engineering sector to achieve a quantum jump in exports.

He said that going into heavy industry and engineering sector is the future of Pakistan. "Since we are in the process of enhancing our exports, it becomes very clear that the country should go into heavy industry and engineering sector which is 60 percent of the world trade," he added.

Musharraf said that only textile sector contributed only 6 percent of the world trade, adding that this was the reason why country's exports were not at the desired level. "If we want to enhance our exports we have to go into heavy industry and engineering sector," he said.

The President said Pakistan and Saudi Arabia enjoy brotherly relations through many years. "His Majesty King Abdullah calls me his brother and he says he means it, I call him my elder brother and I mean it," the president said.

The president appreciated the efforts of Al-Tuwairqi Group Chairman Dr Hilal Al-Tuwairqi for development in Pakistan.

Talking of business and economic relations between Pakistan and Saudi Arabia, he said that both the countries would cement these bonds in the 21st century.

He said this century was not geo-politics, but it was geo-economic. It is the economic, trade and commercial relations, which cement bonds (between the nations), he added.

President Musharraf said that trade was improving between the two brotherly countries, but investment was to be further encouraged. Dr Hilal was exactly doing the same to further enhance bilateral relations.

Referring to the policy of deregulation, liberalisation and privatisation, he said that it has paid dividend and caused upsurge in the economy.

He urged Dr Hilal to participate in the privatisation of Pakistan Steel Mills and modernise it. This is the need of the country, he said.

The president said industry was growing at a fast pace. In 2004, it was 18.2 percent and it is in double digits this year and the country needs steel and energy, he added.

He expressed his desire that these two steel mills should expand their production to cater to the demands of the growing industry in Pakistan.

He termed the groundbreaking of Tuwairqi Steel Mills a landmark event.

Industry Minister Jahangir Khan Tareen said that the country's requirement for steel was about 5-6 million tonnes and it would be increased by 7-8 million tonnes in 10 years.

He said the government was undertaking programme to enhance technical expertise in the country. The minister said the government wanted to pass on the fruits of economic upsurge to the people by providing them education, healthcare and clean drinking water.

Dr Hilal Al-Tuwairqi in his lively speech said that his company has selected Pakistan for this latest steel mill due to its investment-friendly rules and regulations.

Calling President Musharraf as the strongest leader in the Islamic world and a man of Islam and peace, Tuwairqi said that he has changed Pakistan. He said that the mill with state-of-the-art technology would start production in 18 months.

Al-Tuwairqi Group Vice Chairman M. Tariq Barlas said that the plant using the latest directly reduced iron (DRI) technology would produce one million tonnes of steel in the first phase. This can go up to three million tonnes, he added.

He said this mill would directly employ 3,500 engineers and technicians and create job opportunities in the services sector.

Barlas said his group was the largest private steel-producing conglomerate in the Kingdom. Earlier, on his arrival, the president performed the groundbreaking and offered Dua for its success.

 

[Neo]

ISLAMABAD (March 31 2006): Pakistan's economy would remain robust this year with gross domestic production (GDP) growth rate at 6.5 percent, says the Economic and Social Survey of Asia and the Pacific-2006.

However, there are concerns about the overall budgetary deficit in years ahead as it may rise again. Besides, weak buoyancy of tax revenue, unemployment and poverty still remain the big challenges.

The survey launched here on Thursday points out that the economy of the Asian Pacific region grew strongly in 2005, aided by a buoyant global economy and the region should maintain its growth momentum in 2006, barring any unfavourable external events.

For 2006, the survey forecasts that oil prices will fluctuate within the range of $50-55. There are fears, however, that they may touch $100 a barrel within the next four years.

Despite high global energy prices, the price pressures rose only moderately in 2005 and are expected to remain muted or even ease slightly in 2006.

The Unescap has praised Pakistan's impressive economic growth in 2005. The GDP growth of 8.4 percent in 2005 was the highest in the last two decades. The factors which contributed to acceleration were strong domestic demand, better weather conditions for agriculture, continuity of economic policies and a robust financial sector.

The government had set a growth target of 7 percent of GDP for 2006, less than the rapid 8.4 percent achieved in 2005 but higher than the long-term growth trajectory of 6 percent.

A number of factors may interfere however; agriculture, prone to weather-related fluctuations, may perform below expectations. On the other hand, large-scale manufacturing may achieve the target and growth in services is expected to remain strong. Sustaining a higher growth rate is thus possible.

The earthquake is expected to have a minimal impact on economic growth. Natural disasters, damage and destroy assets, however, the repair and rebuilding of these assets generates economic activity that can help growth. Keeping all these factors in view, the surveys indicates that the GDP should grow 6.5 percent or higher in 2006.

There are indications that the economy as a whole is not likely to lose momentum in the short-term as a result of the devastating quake.

There was a sharp increase in nominal investment supported by strong macroeconomic fundamentals, increased availability of credit and a significant rise in foreign direct investment (FDI).

However, the investment to GDP ratio has remained at about 17 percent in the last four years. On the supply side, agriculture performed exceptionally well in 2005, with good weather and supportive government policies contributing to growth rate of 7.5 percent, an increase of 2.2 percent than in 2004.

Large-scale manufacturing recorded an impressive and broad-based growth rate of 15.4 percent in 2005. The service sector grew by 7.9 percent in 2005, in line with the higher growth in the commodity-producing sectors.

Inflationary pressure strengthened considerably in 2005, as inflation rose from 4.6 percent in 2004 to 9.3 percent.

Three years of strong economic growth, complemented by record low interest rates and the ongoing structural shift of many households towards higher consumption have injected new vigour into domestic spending.

This spending, coupled with rising oil and other commodity prices, contributed to a sharp increase in inflation in 2005. Food inflation reached double digits, a heavy burden on the poor who spend most of their income on food.

The government took several measures to ease inflationary pressures by not passing on to consumers the entire increase in the international prices and it began to tighten monetary policy to ease demand pressures.

The inflation is expected to drop to about 8 percent in 2006, pulled down by the decline in aggregated demand implicit in the lower growth estimate, a high base effect for 2006 prices and an anticipated improvement in food supplies.

However, prices of construction materials are expected to increase at a faster pace because of supply bottlenecks associated with the reconstruction work in the wake of the earthquake.

Budget deficit brought down to a relatively low level in recent years may rise again. In fiscal year 2005, it stood at 3.3 percent of the GDP.

Tax revenue buoyancy remained weak, as reflected in the continuing fall in the tax to GDP ratio that limits the government's ability to provide adequate funds for infrastructure and social programmes.

High growth of exports was outpaced by even higher growth of imports and current account turned into deficit. In 2005, while exports grew at a healthy rate of 16.9 percent, imports grew almost twice as fast, at 32.3 percent.

Higher oil prices led to a substantial increase in import payments and to higher shipment charges and so to higher prices for other imports as well. While growing domestic demand boosted import, imports of machinery and raw material also increased substantially.

Coupled with these large remittances, gains from the lower interest payments on Pakistan's external debt and liabilities partially offset the impact of the large trade gap. As a result, the current account deficit was contained in 2005.

The survey points out that there has been a significant increase in net inflows of capital in 2005. Capital inflows included mainly one-off inflows and an increase in concessional long-term loans from the World Bank and the Asian Development Bank. Foreign Direct Investment (FDI) reached $1.5 billion in 2005, 61 percent higher than in 2004. New FDI is so far concentrated in a few sectors such as telecommunications, finance and insurance and oil and gas exploration.

Following the adoption of a robust strategy of debt reduction, Pakistan's external debt declined from $37.9 billion at June-end 2000 to $36.6 billion at March-end 2005.

Highlighting the challenges, the survey says that the government expenditure related to the earthquake is likely to put pressure on the budgetary balance but with the continuing fiscal discipline, prudent monetary policy and focused attention on improving infrastructure and social sector indicators, the economy should maintain its medium-term growth trajectory.

Besides, enhancing the buoyancy of tax revenues, the growth in current expenditure needs to be curtailed and imbalances in the external sectors need to be addressed to ensure that the economy does not deviate from the growth path, achieved in the past few years.

Volatile oil prices: The current bout of high oil prices is hurting countries and if oil prices rise further by $10 a barrel, GDP growth of a developing country such as Pakistan can drop by 0.5 percent, inflation can rise up to one percent and current account deficit can widen up to 0.3 percent of the GDP.

The Challenge of Avian Influenza: The region has suffered significant human and economic losses as a result of the outbreak of H5N1 and estimates of human deaths from a possible global pandemic of the highly pathogenic avian influenza range from five million to 150 million people.

As a conservative loss in GDP from a pandemic would amount to $200 billion in just one quarter and in a worst case-scenario could plunge the global economy into recession.

 

[Neo]

ISLAMABAD (March 31 2006): The US ambassador, Rayan C Crocker has said that the social and economic development of Pakistan is the significant aspect of US-Pakistan strategic relationship.

Speaking at the launching ceremony of US-funded project of "Mitigating Child Labour through Education" here on Thursday, he said "earlier this month Bush and Musharraf committed themselves to the long-term strategic and significant partnership.

The ambassador said that promotion of education is the only suitable and sustainable way to achieve social and economic goals and the US has been the major partner of Pakistan in education sector.

Last year, Crocker said, the US government provided 66 million dollar to Pakistan under different programmes. Save the children-UK, in collaboration with US Department of Labour has prepared a project worth 4 million dollar to integrate 15,000 out-of-school children with the mainstream schooling system, he added.

He said that the evil of child labour could only be eradicated by making the access of education to every one, creating awareness and removing poverty. The terrible impact of child labour is that it not just deprives children from their inherent right of education but also leaves negative impact on social and economic development.

He said that the US government had provided 16 million dollar funding to Pakistan in different projects to help it eradicate the menace of the child labour.

Minister for Education, Javed Ashraf Qazi said the poverty and non-availability of education are the major causes of increasing child labour.

The minister denounced non-governmental approach in promoting literacy saying that a majority of their initiatives have failed to produce results because of their misdirected approach to the issue.

He said that the Pakistan needed long-term partnership and permanent initiatives in education sector rather than temporary programmes. It would have been better if 'Save the Children' would have established a vocational training centre on permanent basis rather than chalking out an initiative for 15,000 out-of-schools children for few years, he added.

He regretted that the ministry was not consulted before launching the project.

The minister also came hard on Afghans saying that they must return to their country as Pakistan had paid high price for hosting them. The Afghans are involving themselves in crimes, now. Since they have an elected government in their country, there is no point of staying in Pakistan, he observed.

 

[Neo]

KARACHI (APP): President Pervez Musharraf said Thursday Pakistan will gradually shift its focus from agriculture and textile to heavy industry and engineering sector to achieve a quantum jump in the country's exports.

He was speaking at the ground breaking ceremony of US $ 130 million state-of-the-art steel making Tuwairqi Steel Mills (TSM) over an area of 220 acres at Port Qasim. The production capacity of the TSM can be expanded to 1.5 million tons and subsequently to 3 million tons in future.

Sindh Governor Dr Ishratul Ibad, Chief Minister Dr Arbab Rahim, Industry Minister Jahangir Tareen, Saudi Ambassador in Pakistan Ali S Awadh Asseri and senior civil and military official and members of diplomatic corp were also present on the occasion.

The President said going into heavy industry and engineering sector is the future of Pakistan.

"Since we are in the process of enhancing our exports it becomes very clear that the country should go into heavy industry and engineering sector which is 60 percent of world trade", he added.

President Musharraf noted that only six percent of world trade was in the textile sector and added that this was the reason why country's exports were not at desired high level.

"If we want to enhance our exports we have to go into heavy industry and engineering sector", he observed.

Referring to the training programme of Al-Tuwairqi Group for Pakistani engineers and technicians, he said that was the real transfer of technology and enhancing the quality of manpower in Pakistan.

Pakistan, he said, has embarked upon a programme to enhance the quality of its human resource in Pakistan. "For this purpose, we have planned to establish six engineering universities in Pakistan with the help of Sweden, France, Germany, Netherlands and Austria", he added.

President Musharraf said that these universities will start functioning in 2008 and their disciplines will be heavy industry and engineering sector with a view to enhance expertise of our young engineers.

"For enhancing expertise of our technicians, we have set up a seperate body in the form of Technical Education and Vocational Training Authority (TEVTA)," he said and added that the body is headed by Saleem Altaf.

He said that technical education was taken away from the Education Ministry and it will be looked after by TEVTA which will ensure quality training of technicians.

The government is also looking into the present and future needs of Pakistani industry and these universities will design disciplines according to these requirements.

"This is the spectrum how we want to take our youth forward. At the end of the day it is human resource development which will propel us forward", he opined.

The president said that the power potential of a nation was basically based on its population and the quality of its human resource. Human resource is the area where we are lagging behind, he pointed out.

He thanked Dr Hilal Husain of Al-Tuwairqi Group for imparting quality training to engineers and technicians.

The President said Pakistan and Saudi Arabia enjoy brotherly relations through many many years. "His Majesty King Abdullah calls me his brother and he says he means it. I call him my elder brother and I mean it", the president said.

Calling Dr Hilal as his brother, he appreciated his (Dr Hilal's) efforts for development in Pakistan.

Talking of business and economic relations between Pakistan and Saudi Arabia, he said that both the countries will cement these bonds in the 21st Century.

He said this century was not a geo-politics, but it was geo- economic. It is the economic, trade and commercial relations which cement bonds (between the nations), he added.

President Musharraf said that trade was improving between the two brotherly countries but investment was to be further encouraged.

Dr Hilal was exactly doing the same to further enhance biltaeral relations.

Referring to the policy of deregulation, liberalization and privatization, he said that it has paid dividends and caused upsurge in the economy.

He urged Dr Hilal to participate in the privatization of Pakistan Steel Mills and modernize it. This is the need of the country, he noted.

He said industry was growing at a faster rate. In 2004, it was 18.2 percent and it is in double digit this year and the country needs steel and energy, he added. He expressd a desire that these two steel mills should expand their production to cater to the demand of the growing industry in Pakistan.

Calling the ground breaking of Tuwairqi Steel Mill a landmark event, he said it a great day for Pakistan. This is in consonance with our vision of taking country forward.

"Our vision is to shift focus gradually from agriculture and textile to heavy industry and engineering sector."

Industry Minister Jahangir Khan Tareen said that country's requirement for steel was about 5 to 6 million tons and will be increased by 7 to 8 million tons in next ten years.

He said the government was undertaking programme to enhance technical expertise in the country.

He said the president of Pakistan will directly look at the investment opportunities.

The Minister said the government wanted to pass on fruits of the economic upsurge to the people by providing them education, healthcare and clean drinking water.

Chairman Al-Tuwairqi Group, Dr Hilal Al-Tuwairqi in his lively speech said that his company has selected Pakistan for this latest steel mill for its investment friendly rules and regulations.

Calling President Musharraf as the strongest leader in the Islamic World and a man of Islam and peace, Tuwairqi said that he has changed Pakistan.

Pakistan is a leader of the entire Muslim World, he said.

He said that the mill with state of the art technology will start production in 18 months.

Vice Chairman Al-Tuwairqi Group M Tariq Barlas in his address said that the plant using the latest directly reduced iron (DRI) technology will produce 1 million tons of steel in the first phase. This can go upto 3 million tons, he added.

He said this mill will directly employ 3500 engineers and technicians and create a massive job opportunities in the services sector.

Barlas said his group was the largest private steel producing conglomerate in the Kingdom.

Earlier, on his arrival, the president performed ground breaking and offere dua for its success.

 

[Neo]

The US Economic Relationship with India & Pakistan
Friday, 31 March 2006, 9:52 am
Press Release: US State Department

The U.S. Economic Relationship with India and Pakistan
PART I

Josette S. Shiner, Under Secretary for Economic, Business, and Agricultural Affairs
Address to the Heritage Foundation
Washington, DC
February 24, 2006


"I would define the objective of transformational diplomacy this way: To work with our many partners around the world to build and sustain democratic, well-governed states that will respond to the needs of their people and conduct themselves responsibly in the international system. . . This is a strategy rooted in partnership, not paternalism in doing things with other people, not for them. We seek to use America's diplomatic power and our foreign assistance to help foreign citizens to better their own lives, to build their own nations, transform their own futures, and to work with us to combat threats to our common security "

Secretary Rice, Georgetown University, January 18, 2006

TALKING POINTS AND THEMES

* In a few days, President Bush will make historic visit to both India and Pakistan, two countries that are critical to this vision of transformational diplomacy, and with which we have developed close partnerships in the last few years.

* Our relationships with both India and Pakistan are complex, broad, and deep, now covering dozens of global, regional and bilateral issues.

* The President's trip will highlight how far these relationships have come since 2001. Nowhere is this more evident than on the economic side.

* Our economic relationships are now a foundational part of these partnerships. Our economies are increasingly interlinked, bringing innovation, trade, opportunity, and prosperity to all our peoples.

INDIA

* When I was recently in Davos for the World Economic Forum, I saw a sign in the Zurich airport that said, "India: World's Fastest Democracy."

* President Bush has made a fundamental judgment that strategic partnership with India will be central to the future success of American foreign policy in South Asia and around the world. The visit of Indian Prime Minister Manmohan Singh to Washington last July marked a watershed in our relationship; the President's visit there next week will be another major step.

* These visits, and the initiatives we have launched, showcase the fact that the U.S.-India bilateral relationship has emerged from a long period of "unproductive estrangement."

* This new relationship began 15 years ago, when India's leaders including current PM Manmohan Singh decided to initiative serious economic reforms. But only in the past 3 years can we say the "planets aligned" for a significant transformation in U.S.-India relations.

* A strong, democratic India is an important and natural partner for the United States. We expect India to play an increasingly important leadership role in 21st Century Asia, working with us to promote democracy, economic growth, stability and peace in that vital region.

* Our relationship with India has been transformed across the board: in trade, energy, education, agricultural cooperation, scientific research and in other areas.

* We have launched strategic dialogues or concluded agreements on: + Airline access and open skies + Trade in sensitive technologies + Environment + Commercial issues and more

* And, of course, the civilian nuclear agreement we are working to complete.

* These initiatives showcase our common values and our shared commitment to preserve and promote open societies. We are interested in developing a strategic partnership that advances shared interests and enhances global security; and we look to strengthen cooperation in all areas important to the well being of both nations.

Why Now?

* President Bush and former PM Vajpayee took the initial steps to transform the U.S.-India relationship. And we have moved even farther with PM Singh.

* Private Americans and Indians have worked hard to bring our countries closer together, though commercial, educational, cultural, scientific, and other ties.

* Indians are a very influential presence in Washington, on Wall Street, and in the media. 2 million people of Indian origin are in the U.S. There are over 85,000 Indian students in the U.S., more than from China.

* 25 percent of Silicon Valley firms were founded or are led by people of Indian origin. Polls in India show a remarkable 75percent favorable view of the U.S.

The Economic Relationship

* The U.S.-India economic relationship is poised to take off. The bilateral Economic Dialogue is the cornerstone of our economic cooperation, and the main avenue for addressing issues of the greatest importance to our private sectors.

* Since the early 1990s, India has progressed far in liberalizing its tariff regime and investment environment, and these major changes have fueled the growth and increased prosperity of recent years.

* By 2025, India's economy is expected to be one of the five largest in the world. It will soon be the world's most populous nation, with an increasingly young, skilled labor force.

* U.S. exports to India grew 30 percent last year; Indian exports to the U.S. grew over 20 percent. Since 1997, bilateral trade has grown from $10 billion to almost $30 billion in 2005.

* While outsourcing has become a controversial issue, the U.S. actually enjoys a healthy surplus in trade in services with India. In 2004, the U.S. exported $4.6 billion worth of services to India, a surplus of $1.8 billion.

* Despite its impressive record of economic growth during the last decade, India still struggles with many of the persistent challenges faced by developing countries: insufficient and underdeveloped infrastructure, inefficient markets for goods and agricultural products, and minimal access of credit and capital among the urban and rural poor.

* In addition, India still suffers from a shortage of foreign capital and investment, which can bring in key, new technologies, create jobs, and modernize industries.

* While annual FDI to India is growing, India's FDI is still one-tenth of that of China.

* Our near term energies will focus on several sectors where we believe further liberalization and reform are needed, including the financial sector, the retail sector, and improved IPR protection. And we need to resolve legacy commercial disputes that are important to U.S. and Indian companies.

* In addition, we are working with India on a broad range of energy issues in the U.S.-India Energy Dialogue, which is aimed at strengthening energy security and promoting the development of stable and efficient energy markets in India.

Civil Nuclear Agreement

* In their July 18 Joint Statement, President Bush and Prime Minister Singh committed to work with Congress and with our international partners toward full cooperation with India in civil nuclear energy. India for its part committed to take a number of important nonproliferation steps that will bring it closer to international non-proliferation practices.

* The goal of the initiative is to provide India access to the technology it needs from the U.S. and elsewhere to build a safe, modern, and efficient infrastructure that will promote a cleaner, more secure global energy supply to support India's growing economy. At the same time, the additional nonproliferation commitments India made as part of the Joint Statement will, once implemented, strengthen the international nuclear nonproliferation regime.

* We are also working closely with India on issues in the WTO to propose solutions and forge agreements that can translate the promise of the WTO's mission and the new era of U.S.-India relations into reality. India's voice carries weight and credibility in many areas of the world, and many developing countries look to India as a leader in major global issues. This continued effort will take hard work on both sides, and we look forward to this opportunity to engage India seriously, on behalf of both our peoples.

 

[Neo]

PART II - continued

PAKISTAN

* As the President said in his speech on Wednesday, Pakistan now has the opportunity to write a new chapter in its history. And the United States wants to build a broad and lasting strategic partnership with the people of Pakistan.

* At their June 2003 meeting at Camp David, President Bush made a commitment to develop with Pakistan a long-term, broad-based partnership as evidenced by the five-year, 3 billion dollar commitment.

* We look forward to building on that commitment, developing our shared interests in promoting prosperity, peace, security, mutual understanding and tolerance in the region and across the globe.

* We also intend to strengthen cooperation on counter-terrorism and security including striking at the conditions that give rise to extremism and terrorism, such as poverty, ignorance, and hopelessness.

* As the President stated on Wednesday, the United States will continue to work with Pakistan to strengthen the institutions that help guarantee civil liberties and help lay the foundations for a democratic future for the Pakistani people. The United States and Pakistan both want the elections scheduled for next year to be successful. This will be an important test of Pakistan's commitment to democratic reform, and the government in Islamabad must ensure that these elections are open, free and fair.

* Our partnership with Pakistan will increasingly build on expanded bilateral commercial links, particularly greater trade and investment, and also cooperation aimed at fostering expanded commerce within the region including with Afghanistan and Central Asia. The U.S. is Pakistan's largest partner for both investment and trade.

* We hear from many sectors of Pakistan's economy an eagerness for increased trade with the U.S. We have encouraged Pakistan to further diversify exports away from a heavy reliance on textiles in order to be less susceptible to economic shocks and in order to have more opportunity to expand and take advantage of its plentiful, skilled workforce. One of our assistance programs is focused on helping Pakistan improve its competitiveness in dairy, gems and jewelry, and marble (sectors identified through public-private dialogue).

* Pakistan has experienced strong economic growth in the last five years. In 2005, Pakistan had the second fastest growing economy in Asia. Although it will need to continue economic reforms and contain inflation to continue these positive trends, Pakistan has taken great strides from its bleak performance in the late 1990s.

* Pakistan, guided by a strong team headed by Shaukat Aziz, the previous Finance Minister who is also now Prime Minister, engineered a stunning turnaround during which strong export growth lead to record foreign reserves in 2004, after teetering on the brink of economic disaster in the late nineties.

* Our engagement with Pakistan on building its economic future will grow in new and mutually beneficial ways. One that I can highlight today are our joint efforts to conclude negotiations for a high-standard Bilateral Investment Treaty, or BIT, which will increase investment opportunities in both of our countries.

* By fostering economic development and opportunity, we will reduce the appeal of radical Islam and demonstrate that America's a steadfast friend and partner of the Pakistani people.

* The American response to the needs of the Pakistani people after the recent earthquake is another sign of America's commitment to this partnership. Not only were American relief workers on the ground there almost immediately, but the United States has pledged more than a half a billion dollars for relief and reconstruction, including $100 million in private donations from our citizens.

Conclusion

The President spoke Wednesday about the great changes taking place inside India and Pakistan and how they are helping to transform the relationship between these important countries. He pointed out that good relations with America can help both nations in their quest for peace. He noted that Pakistan now understands that it benefits when America has good relations with India and that India understands it benefits when America has good relations with Pakistan. The President believes that India and Pakistan now have an historic opportunity to work toward a lasting peace and we are encouraged and optimistic because, as the President said, "Prime Minister Singh and President Musharraf have shown themselves to be leaders of courage and vision." The President concluded with the following words:

[W]e can proceed with confidence because we know the power of freedom to transform lives and cultures and overcome tyranny and terror. We can proceed with confidence because we have two partners two strong partners in India and Pakistan.

Some people have said the 21st century will be the Asian century. I believe the 21st century will be freedom's century. And together, free Asians and free Americans will seize the opportunities this new century offers, and lay the foundations of peace and prosperity for generations to come.

Civ-Nuke (IF ASKED)

Both India and the United States are taking steps to implement the civil nuclear cooperation initiative as spelled out in the July 18th agreement. The Government of India is currently working to create a credible and transparent plan for the separation of India's civilian and military nuclear facilities. Upon completion of such a plan, we hope to be able to secure the support of the U.S. Congress to adjust our legal frameworks to allow for full civil-nuclear cooperation with India. Similarly, we will work with our partners in the Nuclear Suppliers Group (NSG) to seek accommodation for India.

* The initiative faces challenges. India's plan for separation of its civilian and military facilities must be credible and defensible from a nonproliferation standpoint and be comprehensive enough to assure supplier states and the IAEA that materials and equipment will not in any way contribute to India's weapons program.

* We believe additional conditions such as implementing a moratorium on fissile material production, ratifying the Comprehensive Test Ban Treaty, and/or joining the NPT as a non-nuclear weapon state "would likely be deal-breakers." The Joint Statement commits India to work toward the completion of a multilateral Fissile Material Cutoff Treaty (FMCT) and we believe this is a significant step forward.

Iran and Non-Proliferation (IF ASKED)

* In September 2005 and earlier this month as well, India joined the majority of IAEA Board of Governors' members in supporting a resolution finding Iran in noncompliance of its safeguards obligations.

* These votes are important, as they demonstrate that India is taking a greater, more active role in strengthening nuclear non-proliferation regime. India sees it in its own interest, as well as the world's, to join the growing international consensus calling on Iran not to develop a nuclear weapons capability.

* Speaking of Iran, I should note that we do have concerns, with respect to India and some other countries, about investment in Iran's oil and gas sector, including aspects of energy cooperation with Iran such as pipelines and LNG exports. Proposals for a gas pipeline linking Iran with the Indian subcontinent are troubling. Our views on this are well-known and it remains an issue of our bilateral dialogue.


Released on March 19, 2006

http://www.scoop.co.nz/stories/WO0603/S00556.htm

 

[Neo]

KARACHI (April 01 2006): Pakistan's strategic location makes it the most attractive place in the region to be used as a hub for carrying out international trade with a large number of countries.

Talking to APP here on Friday, Netherlands-Pakistan Business Council President Martin J. Leushuis said there were vast opportunities for foreign businessmen to send their exports to other countries through Pakistan.

That would not only expand the area of their trade but also propel economic activity in the region, which was the need of the hour in the era of global trade, he said.

Martin said he was doing his best to take business community from the Netherlands to Pakistan so that they could see for themselves the conducive environment available for engaging in a large number of different business activities.

Because, he said, wrong perceptions of European people would only be rectified when they themselves visited this country and interacted with the business community here.

He said a lot could be done to bring investment in the country and he acknowledged the serious efforts of the government of Pakistan on this count. He hoped that if sustained efforts were continued to be made in the vigorous manner like this, positive outcomes would certainly be seen.

 

[Neo]

Saturday April 01, 2006

KARACHI, April 01 (Online): Governor State Bank of Pakistan Shamshad Akhter has said that Pakistan would be able to achieve its target of $ 28 billion exports in the year 2010.
"In view of the past performance shown by Pakistan in exports, which increased by 8.6 billion in the past five years, a target of $ 28 billion in year 2010 was very much possible," she said while addressing at investment conference at a local hotel here on Friday.

The export potential was high in areas such as food processing and milk processing, seafood, gemstones and software and IT services.

"If these segments are effectively exploited, Pakistan will be able to realize its 2010 target," she said.

Pakistan has a road map for further deepening of reforms and addressing any policy, legal and regulatory distortions, which would ensure the continuation of recent strong economic performance well into future, Shamshad said.

The SBP chief pointed out that Pakistan’s export structure in terms of share of value added goods, both in the textile and non-textile sectors, has improved, However, she said that there is further room for improvement and emphasized on the importance of diversifying the international export market of Pakistani products.

Talking about the recent high inflation rates, Shamshad Akhter informed that due to right monetary stance taken by SBP, the inflationary pressures have started to ease off, she said.

Dr Shamshad termed the private sector as the real engine of growth and indicated that credit, which is vital to facilitate its growth and robust performance, has been increasing steadily over the past many years.

 

[Neo]

RAWALPINDI (April 02 2006): In a meeting on Saturday, chaired by President General Pervez Musharraf, it was decided to start the process of rebuilding of destroyed houses in the earthquake affected areas from April 7, and build a new city in place of the completely ravaged town of Balakot, on modern lines.

The meeting was attended by Prime Minister Shaukat Aziz, NWFP Chief Minister Akram Khan Durrani, Information Minister Rashid Ahmad, Azad Jammu and Kashmir Prime Minister Sikandar Hayat, Earthquake Reconstruction and Rehabilitation Authority Chairman Altaf Saleem and senior officials.

The governments of NWFP and Azad Kashmir would begin distributing forms among the affectees from April 7, and after ten days' processing period, would start distribution of Rs 75,000 each for reconstruction of completely destroyed houses and Rs 50,000 each to the owners of partially damaged houses.

The meeting, which lasted for more three-and-a-half hours, also approved the provision of monthly subsistence allowance of Rs 3,000 to each affected family, for six months.

The President and the Prime Minister noted that distribution of Rs 4.5 billion over six months would greatly enable the families to recover from the losses, and start rebuilding their lives, and ultimately stand up on their own feet.

Addressing the meeting, the President vowed to build quake-resistant houses and infrastructure in the quake-shattered areas as part of the government's efforts to turn the challenge into an opportunity for the survivors.

He reaffirmed the government's commitment to rebuilding houses on owner-driven strategy and said that the government would assist the survivors with technical advice to construct their houses futuristically.

On the reconstruction of infrastructure, he said it would take place under a need-based strategy as the government would not just go for reinstating the damaged facilities but put in place educational institutions, hospitals, government buildings and roads on modern lines.

The President appreciated the efforts of Erra in planning the mammoth task of reconstruction of houses and infrastructure.

 

[Neo]

'Safta to strengthen Pak-India trade relations'
KARACHI (April 02 2006): The South Asian Free-Trade Agreement (Safta) will be a stepping stone in boosting trade between India and Pakistan. This was stated by Indian delegation leader Jayanti M. Patel during a meeting with members of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Federation House here on Friday.

The Indian was here in connection with Expo Pakistan 2006. He said that there was a need to open up the borders so that all means of transportation could be used for exchange of goods.

There were several products which India and Pakistan were exporting through the third countries, thus benefiting those countries, he said, adding it was in the interest of both the countries to don direct trading in all those items.

The FPCCI President Chaudhry Muhammad Saeed expressed satisfaction with the progress of composite dialogue between Pakistan and India, which would lead to further improvement in bilateral trade relations.

He said that the opening of road, rail, sea and air links for transportation of goods, though belated, would be helpful.

He said that increase in bilateral trade would benefit the consumers of the both the countries. Jayanti Patel and Chaudhry Muhammad Saeed agreed that both the FICCI and FPCCI would recommend to their governments not to restrict businessmen to visit specific cities.

The FPCCI President stressed the need for resolving the core issue of Kashmir, and pointed out that Pakistan had given five to six options in this regard.-PR