Pakistan Economy - News & Updates - Archive

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Gas production likely to soar in Tal Block ​

KARACHI: Gas reserves and productions from two fields in the Tal Block are expected to increase around 300 mmcfd and 5 tcf by the end of 2008, sources in the energy sector told Daily Times here on Tuesday.

Geologists believe that gas production of these two fields would rise by 300 mmcfd (million metric cubic feet per day), separately with the ratio of 250 mmcfd and 50 mmcfd. The reserves of Tal Block have reached 2.5 tcf (trillion cubic feet) as per official statement issued by Pakistan Oilfields Limited (POL), while geologists believed it will enhance to 5 tcf by the end of 2008.

Enhancing gas reserves and production of the country, the drilling project titled ‘Manzilai Field Development Plan’ was conducted in Manzilai and Makori fields during the first quarter of the current fiscal year. Situating in NWFP near Kohat, Tal Block is currently producing 65 to 80 mmcfd gas.

Energy analyst, Saad bin Ahmed said that the gas production of the Tal Block would be ranked as one of the largest gas producing fields of the country and it is one of its own types as a matter of fact that it will enhance its gas production substantially in short time period.

Pakistan has only six gas fields generating up to 300 mmcfd and it would be the seven major gas field that would also enhance overall gas production of the country for long time period, he added.

He further said that the gas production at Tal Block is likely to take the total gas reserves sufficient for over 30 years. Before this discovery, the country had gas reserves for 20-25 years.

In Taj Block gas reseves, Oil and Gas Development Company Limited (OGDCL) has 30 percent share, Pakistan Petroleum Limited posses 28 percent share and Pakistan Oilfield holds 25 percent stakes, while the remaining shares were divided among the operators MOL and government owner company GHPL. MOL is also the operator of the Tal’s field.

Pakistan has 103 various gas field reserves in different parts. The total gas reserved is estimated around 51 tcf gas on which 33 tcf is consumed. Sui, Boluchistan is the biggest gas-producing field having total estimated reserves of 12.6 tcf. It has consumed around 9.1 tcf since gas reserves discovered while 3.5 tcf reserves are remaining. This field generates 641 mmcfd as per first quarter’s figure. Mair and Qadirpur gas fields are the others biggest gas producing fields of the country with the production of 461 mmcfd 518 mmcfd.

Daily Times - Leading News Resource of Pakistan

 

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Pakistan and Iran agree to sign GSP​

* Iran to build pipeline at the entry point on Pakistani border
* Pakistan will build pipeline in its territory
* India gives cold response to Pakistan’s invitation to hold talks on transit fee

ISLAMAMAD: After agreeing on gas price formula, Pakistan and Iran have agreed in principle during secretary level talks to sign Gas Sale Purchase (GSP) agreement for IPI project worth $7.4 billion during the next two months.

Secretary Petroleum, Farrakh Qayyum, led the Pakistani side and Dr Hojatollah Ghanimi-Fard special representative to Gas Pipeline project led the Iranian side in secretary level talks.

According to high level official in petroleum ministry who participated the talks, 80 percent language correction of the draft document of GSP agreement has been completed during the talks and the 20 percent language correction would be made through e-mail between the two sides.

“Gas Sale Purchase agreement has been finalised during the talks and no big bottlenecks remain,” official said adding the agreement would be signed by the heads of the two countries hopefully within next two months.

The document of the agreement has been finalized by 80 percent regarding the language and technical corrections and the heads of the two countries would sign the agreement hopefully during the current year. However, the schedule of the signing of the agreement between two countries would be finalised later.

He said the gas price would be tied to the ‘Japanese Crude Cocktail’ and Japan Liquefied Natural Gas (JLNG) and also added that the two countries have also agreed on the gas price formula that contains ‘price revision arrangement’ also. However, he said in the price revision agreement it is not agreed that gas price would be revised periodically just as after three, five, seven or ten years.

According to agreed gas price formula, gas prices would be reviewed automatically but there is not time frame work in it,” official said adding gas prices would be reviewed under a formula just as imported oil prices are reviewed.

“We have also noted during the talks that the agreed price formula is not capturing the whole thing and the general price arrangements would also be made,” he said clarifying that however the agreed formula would not be changed.

According the price formula Pakistan, he said, would get the gas from Iran on much lower price than the international price of gas. He further said according the agreed price formula, there would not need to review the gas price during the next ten years.

Official informed that Iran would start supplying gas to Pakistan by the year 2013 and it has also been agreed that Pakistan and Iran would build the pipeline in its respective territory. Iran will build pipeline to the entry point on Pakistani border and from the entry point Pakistan would build pipeline in its territory. The proposed 2,670-km IPI pipeline project has about 1,115-km length in Iran, 705 km in Pakistan and 850 km in India.

Iran has already completed the one-third work on the project in its portion. He also informed this scribe that Pakistan had invited India many times to hold talks to resolve the issue of transit and transportation fee to materialize the billion dollars gas pipeline project but India has not responded the Pakistani invitation in this regard. India says that it is engaged in internal meetings regarding the issue of transit fee with Pakistan and hold meeting later in this regard,” official added.

Daily Times - Leading News Resource of Pakistan

 

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FBS provisional figures: LSM grows by 7.01 percent in two months ​

KARACHI (October 24 2007): Large scale manufacturing industries (LSM) have registered a growth of 7.01 percent during the first two months of the current fiscal year due to the raise in oil, heavy industries production.

Official provisional statistics of quantum index numbers of large scale manufacturing industries (QIM) has been issued by the Federal Bureau of Statistics, which showed the production of major industries in the country had been growing.

LSM is one of the major indicators of the economy, which showed the industrial productivity of 100 items received from different sources, ie Oil Companies Advisory Committee (OCAC), Ministry of Industries and Production and Provincial Bureaus of Statistics.

The OCAC supplied the data of 11 items, while the Ministry of Industries and Production gave the data of 35 items and the Provincial Bureaus of Statistics provided the data of 54 items.

With 7.01 percent growth, the overall QIM July-August has reached 204.42 points from 191.03 points during the same period of 2007 fiscal year. Major share in this growth was of the oil production, as during the first two-month of the current fiscal oil production (OCAC index) has gone up by 16.48 percent from 152.84 points to 178.02 points. LSM indices witnessed a growth of 9.37 percent during August 2007, to 205.90 points as against 187.72 points during the same period of the last fiscal.

Growth in the production of major industries, including sugar, cigarettes, cotton yarn, cotton cloth etc, has registered by 7.06 percent during July-August of the current fiscal and some 9.17 percent during August 2007.

The production of furnace oil, motor sprit and LP has risen by 26.03 percent, 26.90 percent and 6.54 percent respectively, while the jet fuel, kerosene oil and lubricants oil has declined by four percent, 5.20 percent and four percent respectively during July-August of the current fiscal.

In addition, production of sugar, cigarettes, soda ash, pig iron, motorcycle and buses registered a growth of 5.54 percent, 4.63 percent, 21.59 percent, 22 percent, 27.51 percent and 41 percent during the first two months of 2008 fiscal year, while the trucks, tractors and paper board production dipped by 15.32 percent, 5.43 percent and 13.87 percent.

Similarly, vegetable ghee production has declined by 3.84 percent, sole leather by 14.29 percent, bicycle by 12.48 percent, electric transformer by 17.70 percent, soap by 2.38 percent and production of tea blending has declined by 2.50 percent in July-August 2007.

It may be mentioned here that during the last fiscal country has missed its LSM growth target by 4.50 percent, as the overall LSM growth stood at 8.50 percent as against the growth target of 13 percent.

Business Recorder [Pakistan's First Financial Daily]

 

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Cotton output estimated at 12.8 million bales ​

ISLAMABAD (October 24 2007): Pakistan expects its cotton output in the 2007-08 crop year will be 12.80 million bales, 1.33 million bales less than targeted because of pests and more rain than expected, Food and Agriculture Minister Sikandar Hayat Khan Bosan said on Tuesday.

Pakistan, the world's fourth-largest cotton producer, last year produced 13 million bales. "According to our first assessment, cotton production in 2007-08 will be 12.807 million bales," Bosan told reporters after a meeting of the Federal Committee on Agriculture, which meets twice a year to set and review crops targets. In June, the government set a cotton production target of 14.14 million bales.

Bosan said a final estimate of the crop would be made in February. The cotton crop year runs from April to March. Heavy rain in Sindh and Balochistan provinces and mealy bug and cotton leaf curl virus attacks in the main cotton growing province of Punjab were the reasons for missing the target, Bosan said.

Another reason was a reduction in the sowing area as many farmers switched to sugarcane. But an industry official said he still expected the target of 14 million bales would be met, citing increasing trends in cotton arrivals at ginning factories.

"Cotton arrivals up to October 15 this year were 2.71 million bales compared with 2.46 million in the same period last year," said Akbar Ali Hashwani, chairman Karachi Cotton Association.

"This indicates that the crop size will be close to the estimates," Hashwani said. Cotton bales start to arrive in the market after August, according to the industry officials. Pakistan achieved record cotton production of 14.6 million in 2004-05. Cotton and textiles account for about 60 percent of Pakistan's exports.

Pakistan's domestic consumption fluctuates between 14 million and 16 million bales a year, meaning the country has to import cotton every year to meet growing demand of its textile mills. Pakistan imported nearly 3 million bales in 2006-07 (June-July). Imports in August and September amounted to about 0.55 million bales, an industry official said.

Business Recorder [Pakistan's First Financial Daily]

 

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'Pakistan keen to deepen reforms': Salman stresses more privatisation ​

WASHINGTON (October 24 2007): Pakistan is eager to deepen economic reforms that have delivered historic growth in the country despite political turmoil, Advisor to Prime Minister on Finance and Economic Affairs, Salman Shah said on Monday.

Salman Shah said Islamabad was eyeing "second-generation reforms" to follow a bank privatisation program that helped power five years of 7 percent growth and doubled Pakistan's GDP during the seven-year tenure of President Pervez Musharraf.

"These second-generation reforms would mean a leaner government and a much more active and aggressive private sector," he said in Washington, where he attended the semi-annual meetings of the International Monetary Fund and World Bank.

Shah said his government intended to move forward with privatization of the power and energy sectors as well as railways and airlines. Islamabad also planned tax reforms to broaden the tax base and steps to enlist the private sector in infrastructure development.

"In spite of all the politics, the economy keeps doing well because the reforms have made sure that the economy is now more driven by the private sector than by the politicians," he told reporters.

Pakistan is headed into elections and a tentative transition to civilian rule, under the cloud of political violence, underscored by last week's killing of 139 people in a suicide attack on opposition leader Benazir Bhutto during her homecoming parade in Karachi.

Shah appealed to foreign investors and governments to maintain interest in his country, which borders turbulent Afghanistan and is fighting a mix of home-grown Islamic militants, the Afghan Taliban and al Qaeda operatives.

"In the war on extremism, it's very important that we succeed in Pakistan and that's for the entire world," he said. "On our own, we are not going to be able to sustain it."

The 100 million people in Pakistan under 25, out of a total population of 160 million, represent "an age group that will determine the future of Pakistan and its growth and its economy and its politics," Shah said, underscoring the need to create jobs for young people.

Business Recorder [Pakistan's First Financial Daily]

 

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Heavy Electrical Complex: five pre-qualified bidders being scrutinised ​

ISLAMABAD (October 24 2007): Five pre-qualified parties for Heavy Electrical Complex (HEC) are in the process for due diligence of the transaction in the data room. Three parties have already completed due diligence while two parties are in the process.

These included ABB (Pvt) Limited, Switzerland; Areva T&D, France; Pak Elektron Limited (PEL), Siemens (Pak) Engineering Company Limited, Karachi; and Iljin Heavy Industries Company Limited, Korea.

A pre-qualification committee evaluated these parties for pre-qualification on the statement of qualification (SoQ) basis. Bid documents and time-frame for the pre-bid conference and bidding date will be provided to these pre-qualified parties only.

The Privatisation Commission had invited expression of interests (EoIs) from prospective investors to own, efficiently manage and operate the Company for the acquisition of minimum 90 percent shares of HEC with the management control on an 'as is, where is' basis.

The Heavy Electrical Complex is one of the industrial units of the State Engineering Corporation (SEC) engaged in the manufacturing of power transformers of different types (total annual capacity 3000 MVA) with primary voltage rating of 66 and 132 KV. In addition, the HEC undertakes repair and refurbishment of old and damaged power transformers up to 500 KV. The HEC was incorporated as a private limited company in 1991, and commenced its full-scale commercial operation in 1997.

The Heavy Electrical Complex is located in Hattar Industrial Estate about 65-km from Islamabad. It is spread over an area of 81.379 acres. A total of 63 acres of land is included in the transaction out of which 20 acres is non-core land for expansion. Major clients of its products include Wapda, its corporatized entities and KESC.

The Complex has six main manufacturing shops namely Machine shop, Winding shop, Insulation shop, Core shop, Fabrication shop and Assembly shop. In addition, it has an oil purification shop, high voltage test laboratory equipped with 250-tonne overhead travelling crane. It can diversify its manufacturing range by including other products such as instrument transformers, high voltage circuit breakers and other grid stations equipped for meeting demand of the products in domestic and foreign markets.

The purchaser shall continue to operate company's manufacturing facility and shall not in any way abandon, cease to operate or otherwise shut down the existing company manufacturing facility.

Business Recorder [Pakistan's First Financial Daily]

 

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'Pakistan attractive place for Saudi investors' ​

ISLAMABAD (October 24 2007): Pakistan has become a business hub as the country pursues a policy of 'trade diplomacy' to provide maximum possible opportunities to entrepreneurs for better market access, Pakistan's Ambassador to Saudi Arabia Shahid Karimullah said.

Giving details to media persons about the 'Second Pakistan-Specific Week (Catalogue Show)', which is going to be held from November 3 to 7 at Jeddah Chamber of Commerce and Industry, he said that Pakistan and Saudi Arabia enjoy strong economic relations.

He said that the aim of this show is to convince Saudi Arabian businessmen to invest in Pakistan and, at the same time, market Pakistan's products in that country, Arab News reported. "I urge Saudi businessmen to visit Pakistan and explore the investment opportunities," Karim said. The 'catalogue show' will provide an opportunity for interaction between Saudi and Pakistani entrepreneurs, government representatives and members of the chambers of commerce and industry.

"This (Pakistan) mission is striving to promote trade between the two countries and create business opportunities for companies on both sides. The show will project Pakistan's trade potential and provide an opportunity to Pakistani firms to introduce their products in the Saudi market," he said. He pointed out that Islamabad is pursuing an investor-friendly policy, and added that it has introduced a number of reforms removing all hurdles in investment and providing maximum facilities to the business community.

However, trade between the two countries is still below full potential, the ambassador said, noting that time has come to strengthen business activities between the two countries.

Saudi Arabia is a member of World Trade Organisation, and Pakistan should benefit from its booming business sector, he said. Top Saudi entrepreneurs have shown interest, as some 225 leading Pakistani companies have agreed to take part in the show. Catalogues, brochures, and samples totalling 11,000 will be on display. Representatives of the participating firms will be available to give further information.

High ranking officials from Pakistan, including Tariq Ikram, chief executive of Trade Development Authority, Junaid Ahmad, Adviser to Prime Minister on economic affairs, and Asif Ali, Secretary of Commerce, and representatives of leading manufacturers will attend the show, Karim said. Pakistan's Ministry of Commerce, Trade Development Corporation, Board of Investment, Islamic Development Bank and Jeddah Chamber of Commerce and Industry are sponsoring the event.

Business Recorder [Pakistan's First Financial Daily]

 

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Musharraf unveils package for Northern Areas ​

GILGIT (October 24 2007): President Pervez Musharraf on Tuesday announced a package, giving maximum financial and administrative autonomy to the Northern Areas and elevating status of its Legislative Council to the Assembly. Under the package the Northern Areas Legislative Assembly (Nala) will now have the powers to prepare, debate and pass its annual budget and development plan.

"Most of the powers presently being exercised by the Ministry of Kashmir and Northern Areas would be transferred to the new chief executive and the legislative assembly under the package, the President said, amidst a thunderous applause by the people here at the FCNA Auditorium.

Also the post of the current deputy chief executive of Northern Areas has now been upgraded to chief executive, empowered to exercise full administrative and financial authority. The Minister for Kashmir and Northern Areas, who currently holds the charge of chief executive will become chairman of Northern Areas, said the President, who flew into the scenic valley earlier in the day.

Addressing the notables of the area, he said that most of the 52 proposals prepared by the Northern Areas Legislative Council have been approved by the government, adding, the new measures would promote greater democracy in the area.

He said this will usher in a new era of maximum autonomy for the people of the NAs, fulfilling their longstanding demand. The chief executive, speaker and deputy speaker of Nala can now also resign or face a no-confidence motion, which is a step forward towards greater democracy, the President said.

Business Recorder [Pakistan's First Financial Daily]

 

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Budgetary support ​

Pakistan likely to borrow $1.5bn

Thursday, October 25, 2007

ISLAMABAD: Pakistan is expected to obtain a budgetary support of $1.509 billion from three major multilateral creditors, the World Bank, Asian Development Bank and the Islamic Development Bank during the current fiscal year.

At a time, when Islamabad’s external front is facing pressure owing to the growing current account deficit in the current fiscal year, multilateral creditors are seen coming to rescue the country from the financial crunch on the balance of payments (BoP) position.

The prevailing political uncertainty on Pakistan’s economic front is a cause for concern for economic managers in the wake of upcoming elections and the smooth process of privatisation could be a victim to the deteriorating law and order situation.

The privatisation proceeds that have remained a major source of improving inflows in recent years are set to face a severe blow during the current financial year, sources disclosed.

The country is passing through a phase of political uncertainty, which will remain till the installation of the next elected regime and it can also negatively affect inflows estimated by the government in the form of privatisation proceeds and investments.

Finance ministry sources confirmed to The News that three major multilateral institutions like the WB, ADB and IDB would provide credit lines worth $1.509 billion in the current fiscal year.

During the last financial year in July-March period, multilateral creditors had provided $1.406 billion to Pakistan, the Economic Survey 2006-07 stated.

The sources also pointed out that the WB would be the leading institution among multilateral creditors providing more than $1 billion in budgetary support to Islamabad during the current fiscal.

The second major creditor would be the Asian Development Bank (ADB), it plans to give a credit line worth $329 million in order to improve the balance of payment situation in the country.

The ADB’s support is mainly pouring into project financing and budgetary support will be a lesser part of it. The ADB has recently brought changes to its strategy wherein it has reduced its programme loans from 81 to almost 60.

“The ADB as well as the Government of Pakistan reviews various foreign funded programmes regularly and this reduction is a routine exercise,” said an official.

The third major institution providing budgetary support to Islamabad is the Islamic Development Bank (IDB). According to Finance Ministry estimates, the IDB will provide $100 million budgetary support to Pakistan during FY 2007-08. Although Pakistan’s Balance of Payment (BoP) position is still in a surplus mode, its current account deficit (CAD) is widening sharply.

The CAD had reached the $7 billion mark (4.9pc of GDP) in the last financial year, which is quite worrisome to economic managers. Islamabad is expecting the current account deficit hovering in the same range of 4.9 per cent of the GDP during the current fiscal year.

Policy makers are of the opinion that Islamabad has so far been able to bridge the deficit gap owing to improved inflows in the shape of foreign direct investment and privatisation.

But with an increasingly volatile environment on the political front, it is uncertain whether Islamabad will be able to attract investments or even successfully privatise its state owned entities in the current fiscal.

Budgetary support

 

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‘Curbs on investment in venture capitals be reconsidered’ ​

Thursday, October 25, 2007

KARACHI: Stakeholders in the Private Equity and Venture Capital Fund (PE&VC Fund) have urged the regulator, the Securities and Exchange Commission of Pakistan (SECP), to provide a level-playing field to foreign investors.

They were speaking at the Business Policy Roundtable to give suggestions and recommendations on the draft regulations for private equity and venture capital funds here on Wednesday.

The roundtable conference was organised by the Centre for International Private Enterprise (CIPE), an affiliate of the US Chamber of Commerce, in collaboration with The Indus Entrepreneurs (TiE), a global network of entrepreneurs and professionals.

The conference was organised in the backdrop of objection or suggestion invited by the Commission (SECP) from persons in respect of the said draft within 30 days since the document was made public on August 31, 2007. SECP had introduced venture capital rules in 2001.

The conference participants welcomed extension in the tax holiday for the venture capital companies till 2014. Till this extension is expired the PE&VC Funds sector would have reached a mature stage, Shabber Zadi, a leading economist said at the conference. Government on the recommendation made by CIPE earlier last year extended the tax holiday, Moin M. Fudda, Country Director-CIPE Pakistan said in his welcome address.

The eleven points draft recommendation adopted at the end of one-day conference says: “Restriction on foreign PE&VC funds on seeking funds locally should be eliminated. Moreover, local investors should not be deprived of outing money in foreign PE&VC funds.”

The draft added: “Minimum numbers of investors to form a PE&VC fund should be reconsidered. Internationally, there is no minimum or maximum number of investors generally specified, and the proposed limits of 10 and 50 respectively should be reconsidered, to perhaps zero and 100.”

In accordance with the international trends, restrictions on pension funds and insurance companies on investing in the PE&VC sector should be reconsiders, the stakeholders stressed upon.

Salman A. Shaikh, Commissioner-SECP, welcomed the valuable suggestions and arguments from the stakeholders and promised to remove unnecessary barriers in developing the private equity and venture capital funds market here in the country.

Another participant identified that raising capital was not a big issue for the industry, but finding skilled human resource was becoming a dying art in Pakistan. Seeking a qualified chief executive officer or the director to run a business here had become too difficult, most of the participants developed consensus.

Three companies have been licensed here in Pakistan over the last six years under the 2001 VC rules. While the first ever venture capital fund was formed in 2002 in the country.

A number of private equity initiatives have been announced by various local players in the last two years while some international and regional private equity funds have also started to look at possible entry into Pakistan, stated in the concept paper of the roundtable conference.

Venture capital and private equity are globally established asset classes with an industry size of over US$200 billion.

Christopher Lane Davis, Special Counsel, McCarter & Entlish, LLP, USA said that the US private equity and venture capital industry was substantially free from regulation.

His argument coincided with a stakeholder at the conference who invested in India under the PE&VC regulations. He said that India had no regulation for this sector. SECP-Commissioner, however, believed that firm regulation for any of the sectors made investment low risky.

‘Curbs on investment in venture capitals be reconsidered’

 

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Import of 3m cotton bales likely​

KARACHI, Oct 24: The country will have to spend huge foreign exchange on importing around 2.5 to 3 million cotton bales to meet the expected shortfall even after harvesting around 12.8 million bales as estimated by the government.

The installed capacity of over 10 million spindles consume more than 15 million bales, but cotton production continues to lag behind owing to poor yield and lack of proper management and research work.

Due to short supply cotton prices keep on rising in the domestic market, which makes the entire textile industry unviable.

The cotton crop has been a victim of some pest attack for years but this year a new pest – mealybug – has caused a huge damage to the crop to the tune of 1.5 million bales.

However, Federal Minister for Food and Agriculture Sikandar Hayat Khan Bosan still believes that the country will produce around 12.8 million bales, down from earlier estimates of 14.1 million bales.

Even if we take optimistic production figures of cotton as hinted by the minister, the country will still be importing huge cotton to meet the spinning industry’s demand.

Rising world cotton prices, owing to lesser crop, are yet another factor, which keeps cotton prices highly volatile, and presently are being quoted above Rs3,000 per 40 kg in the domestic market.

Being inflicted by rapidly rising oil prices many countries are striving for alternate energy sources. Consequently, crops such as sugarcane and corn, having potential of being converted into fuel grades, are being sown on a large scale.

As a result of this phenomenon these crops are fetching much higher prices in the world market and growers are fast shifting from cotton to these crops.

The global shortage of cotton against an estimated consumption has soared prices up to $0.66 per lb in New York cotton market, and there is a growing fear that as demand emerges from countries facing short crop, prices would further increase.

Independent estimates place crop size at 12 million bales and also argue that since there are no opening stocks with the mills, the actual available cotton for current season (2007-08) would be at around 11 million bales.

There is panic in the textile industry, which is faced with two- pronged problems. On the one side, they are deeply concerned with rapidly rising raw cotton prices and on the other, they confront with yarn prices which presently do not fetch their cost. Though domestic cotton market prices are still lower than the world market, the industry is of the view that it was still sustaining loss owing to lower yarn prices.

“My unit, which produces around 120,000 pounds of yarn per day is on average has to bear Rs0.3 to 0.5 million loss per day due to price differential,” claimed former chairman of Aptma Waqar Mannoo.

He said up to December 2007, domestic prices would stay lower than world cotton prices, but as local stocks start depleting and actual crop size emerges, the import parity would go higher.

However, Mr Mannoo was of the view that the price differential between yarn and cotton would force many spinning units to close down, and advertisements for sale of textile units have started appearing in the newspapers.

There is a greater need to increase cotton production to keep the textile industry viable, he suggested. In India cotton production has gone very high and this was mainly because of proper handling of BT cotton by the government under the guidance of experts and technologists.

In Pakistan, he said, BT cotton was cultivated by growers by using uncertified seeds, which resulted in a disaster as the mealybug damaged a very large quantity of standing cotton crop in upper Sindh and lower Punjab.

It is also being said that if a large number of mills go out of operation, only then the gap between cotton demand and supply would narrow down.

Pakistan needs an altogether fresh look at cotton crop and a lot of research has to be made to boost per acre yield so that the output could be raised to 20 million bales within next couple of years.

Import of 3m cotton bales likely -DAWN - Business; October 25, 2007

 

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Firm US assurance to support Pakistan: Trade growth​

KARACHI, Oct 24: A number of senior US diplomats met business hierarchy at a series of meetings in Karachi.

The diplomats assured the Pakistani businessmen of their country’s commitment to support Pakistan all through the process of transition and beyond.

The jittery business community was assured that the US has strong indications that the political change would be smooth and would not derail the on-going process of transformation towards a market-based economy that yielded dividends in the form of a robust above six per cent growth rates since 2004.

Over the last two days, US Ambassador to Pakistan Anne W. Patterson and US consul-general Kay L. Anske met members of American Business Council, visited the Karachi Chamber of Commerce and Industry and attended a private dinner in their honour by a senior businessman where a select group of Pakistan’s corporate big-wigs were also present.

The business community of the country is understood to be nervous over the unfolding political situation.

Factors such as: the lose ends in what is perceived to be a West- sponsored stitch-up between the Pakistan People’s Party chairperson Benazir Bhutto and President General Pervez Musharraf, public discomfort of President’s allies in PML(Q), fears of more violence and terror strikes, the lingering case of legality of President Musharraf’s candidature in the controversial Presidential election and the defiant mood of the judiciary, have all added up to create a lingering situation of uncertainty.

“The business can endure a difficult phase if there is some measure of predictability in the so-called transition process. However, when in a society as fragmented as Pakistan, where there are so many variables heading on a collision course, anxiety of investors is perfectly justified,” a leader privately told Dawn.

“We met US diplomats in a cordial atmosphere and the conversation with them was free and frank. Many issues of common interest cropped up, such as businessmen’s reservations regarding proposed ROZs, issues related to adverse travel advisories, problems faced by students wishing to study in the US, discriminatory treatment meted out to textile exports from Pakistan, slow pace of progress over bilateral investment treaty (BIT) and free trade agreement (FTA) also came up. The focus, however, was on the evolving political situation and terror threats that the country is faced with,” a leader who attended the meeting told Dawn.

Majyd Aziz, an active leader who commands respect for his leadership qualities amongst local business community and diplomatic circles hosted the dinner on Tuesday.

“We are often mentioned as a third biggest recipient of US support in the world. We, however, wish to attain that position in trading,” Aziz said who was optimistic and saw a bright future for his community in the country. He saw the level of US engagement as a stabilising factor.

“The interaction of high profile US diplomats, within a week of Oct 18 ghastly incident, with such a wide range of people reflects their resolve to stand by us. It shows the depth of their commitment. Their movement in Karachi also demonstrates that the US does perceive ordinary Pakistanis as tolerant and peace- loving who are bearing the brunt of activities of terrorist elements who work in isolation divorced from general public.”

Explaining the reasons of scepticism of the business community with political leadership in and out of the country, a spokesperson of multinationals said: “We fear that reins of the country will again be in the hands of those self-centred individuals who thrived on loot and plunder, destroyed institutions and promoted the culture of cronyism. It will be a death-knell for serious business if a system of check and balance is not put in place.”

Those who met US diplomats included American Business Council’s Iqbal Bengali, Karachi Chamber of Commerce and Industry office-bearers and President Shamim Ahmed Shamsi and others, including S M Munir, Saifuddin Zumkawala, Tariq Saeed, Amina Syed, Fareeha Haroon, Zubair Motiwala and Salma Ahmed.

Firm US assurance to support Pakistan: Trade growth -DAWN - Business; October 25, 2007

 

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Pakistan-Russia trade meeting: Exporters’ refund claims issue to be raised with Russian authorities​

ISLAMABAD: Pakistan will take up the issue of outstanding claims of Pakistani exporters with the Russian authorities who will be holding meeting with Pakistani officials here in Islamabad on November 15, said an official here on Wednesday.

Official in commerce ministry told Russia has not still paid the money in term of refund claims of Pakistani exporters even after entering into an agreement entitling ‘Agreement on exporters refund claims’ between two sides.

According to official, Russia has to pay over $80 million to Pakistani exporters in term of refund claims that it denied to give after the disintegration of Russia. These refund claims are pending since the war between Afghanistan and Russia. When the Russia was disintegrated after the war in Afghanistan, it denied paying exporters refund claims saying now it will not pay after the disintegration.

Sources said that Pakistan had also taken up the issue with Russian delegation on September 7, 2006 in a meeting held with Pakistani officials to resolve the issue and informed the Pakistani officials that Russian government had not still given approval.

The delegation had opined that the issue of claims of Pakistani exporters would be settled down, however, the problem of one group would be resolved separately.

“But since that time, no step has been taken in this regard and during the talks being held in the mid of next month, the matter would be taken up,” official said. Russia in March 2006 approached Pakistan that it wanted to increase the volume of trade between two sides and pledged to enter into Free Trade Agreement with Pakistan,” official said adding that since that time Pakistan again took up the matter of refund claims saying that the resolution of this issue could lead to Free Trade Agreement between two sides.

Official further said that a delegation visited to Russia to resolve the issue and then two sides entered into an agreement enabling Pakistani exporters to have $75 million in terms of refund claims that were pending for over many decades.

“During that agreement Pakistani government would also get $18 million in terms of shipping rights,” he said adding even after the agreement Pakistani exporters and government is still failing to have money due to Russian authorities’ reluctance.

He said only this move can lead two countries to enter into FTA that Pakistani cabinet has approved initiating negotiations to conclude Free Trade Agreement with Russia but Russian authorities have not succeeded to understand the different articles of the agreement. Therefore, FTA has not been still materialized between two sides.

The current trade volume between two sides is $270 million and Pakistan would improve further in the coming years after the resolution exporters refund claims and entering into Free Trade Agreement, official added.

Daily Times - Leading News Resource of Pakistan

 

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Pakistan has 72.89m mobile phone users​

* Telenor now is the runner-up in the battle of cellular operators

KARACHI: Telenor Pakistan has elbowed Ufone to become the second biggest cellular network provider in terms of subscribers, Daily Times has learnt.

Since the year 2005 Ufone had retained its second position and was considered to be the second biggest mobile phone operator in Pakistan. And this was so until last month when Telenor, with 15.46 million users, overthrew it to claim the second position for itself. Ufone with 15.42 million subscribers now holds the third position.

Sources in the Pakistan Telecommunication Authority told this scribe that the way competition is proceeding, some more interesting happenings may be expected in the coming years as all the companies are putting all their efforts to be the number one mobile phone operator of Pakistan.

Pakistan’s mobile phone market has passed 70-million user mark. Latest figures compiled by the PTA suggest cellular phone connections reached 72.89-million mark by September 2007. Within a period of one month, September 2007, Pakistan’s fast growing telecom industry managed to add 4.89 million subscribers.

According to a PTA official, since January 2007 more than 22.21 million new connections have been sold on the back of comparatively cheaper tariff offers due to the rising competition among the cellular service providers.

Mobilink continues to remain the leading operator in the sector with maximum market share both in terms of subscribers and revenues.

The figures gathered by the telecom watchdog show that by September 2007 Mobilink led the market with 28.57 million subscribers followed by Telenor, which was serving 15.46 million people across the country. Ufone now holds the third position 15.42 million subscribers and Warid is at the fourth position with 11.86 million subscribers. Meanwhile, the aggressively marketed Paktel has managed to grab 1.23 million subscribers.

Among all the new entrants, Telenor has shown its strength by capturing a good market and has left behind its closest competitor Warid within one month’s time to claim the second position. While Paktel, now owned by CMPak, has still been unable to add fuel to the current mobile operators’ battle.

Telecom industry in Pakistan attracted $9 billion foreign investment in the last three years, and another $ 4 billion are expected during the next 3 to 4 years. Around 1.5 million new subscribers are being added each month.

According to some analysts, the mobile phone industry has reached its take-off level and has entered a new phase where investors are keen to invest and subscribers are happy to avail quality services at reasonably competitive prices. Much of this credit goes to the telecom regulator that has created a conductive, and investor and user friendly regime in Pakistan.

The four major companies Mobilink, Telenor, Ufone and Warid have earned better market share during the last fiscal year. These days, the cellular operators are spending huge amounts on advertisement campaigns to introduce different packages for their customers with different tariff packages and incentives.

Daily Times - Leading News Resource of Pakistan

 

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Attracting Spanish investment: Pak exports to Spain could touch $6.2bn: LCCI​

LAHORE: Pakistan’s exports to Spain could touch the figure of $6.2 billion as there are a number of potential sectors including textiles, minerals and fuels, leather products, plastics and plastic products, optical, photo, technical and medical apparatus, raw hides and skins, fish, and fish products where a huge potential exists.

Lahore Chamber of Commerce and Industry (LCCI) Acting President Yaqoob Tahir Izhar stated this while talking to Ambassador-designate to Spain Ms Humaira Hassan during her visit to LCCI on Wednesday. LCCI Vice President Mubasher Sheikh, former President Mian Misbah-ur-Rehaman and former Senior Vice President Sohail Lashari also spoke on the occasion.

Mr Izhar said onus lies with Pakistan Embassy in Spain to ensure dissemination of all business-related information to the chambers in Pakistan so that Pakistan’s business community could be able to do business in the areas where the scope exists.

He informed the visiting diplomat that Pakistani merchandise having superior quality always gets a good response all over the world and a little effort could help Pakistan earn much-needed foreign exchange from Spanish markets.

Mr Izhar said total trade between Pakistan and Spain during 2005-06 was only $512 million with major exports including articles of apparel, cloth accessories, leather and leather products, sports goods, fish and fish products, cane molasses and surgical instruments etc. On the other hand, Pakistan’s imports include organic chemicals, iron and steel, pharmaceutical products, dying and tanning material, transport vehicles and equipments, machinery and parts, tiles, paper and paper board.

He said the best possible way for both the countries to initiate and take the first step is to identify the areas where they can cooperate. Non-availability of required trade-related data is the biggest hurdle in the way of expansion of trade between the two countries. For this commercial section of Pakistan’s Embassy needs to play a proactive role, keep itself abreast of the demand of Spanish markets for imported goods and to engage with Spanish business circles. He urged the Ambassador-designate to arrange sector-specific delegations of Spanish businessmen to visit Pakistan to have first-hand knowledge about the opportunities of trade and investment in Pakistan. Active engagement of the business community and diplomatic missions of the two countries, exchange of trade delegations, exhibitions of products and socio-cultural programmes in each other’s country can be very helpful.

Mr Sheikh urged the ambassador-designate to consider opportunities where joint ventures could be made. He stressed the need for highlighting the strengths of Pakistan’s economy, its strategic location and investment opportunities. He said Pakistan is a land of opportunities for foreign investors. Pakistan is one of the fastest growing economies of Asia along with China and India. Its GDP has averaged 7 percent over the last 4 years. There is increased flow of foreign investment in Pakistan. It was $8.4 billion during 2006-07 as against $0.56 billion in 2002-03. Pakistan is becoming a trade and energy corridor for Central Asian Republics, China and Afghanistan. It has developed Gwadar Deep Seaport and is linking it through a network of roads and rails with these countries. Any investment made in Pakistan by foreign investors as such will find its market in these countries. Doing business in Pakistan is easier than the other regional countries.

Daily Times - Leading News Resource of Pakistan