Pakistan Economy - News & Updates - Archive

[Neo]

GDP growth to remain at 6.9 percent: economists ​

KARACHI (November 09 2007): Despite imposition of the state of emergency, macro-economic environment will remain stable and Pakistan's gross domestic product (GDP) growth will remain at 6.9 percent, driven by domestic consumption, economists said. They believed that if the same situation would linger on, then it could hurt the foreign inflows, besides putting pressure on the foreign exchange reserves.

Leading economist Muzammil Aslam, commenting on the situation, said that emergency had not affected the economy and business practices as the old economic policies were being followed. There were no restrictions on capital movement and foreign exchange regulations had not been disturbed, he said.

Although, two leading credit rating agencies Moody's and S&P had downgraded Pakistan's credit rating outlook from stable to negative, the country may not face capital fight and turmoil in the financial and forex markets.

Referring to Holland's stoppage of aid, he said no country had discontinued the aid and assistance to Pakistan. As regards the country's exports, he said the emergency would not affect the momentum of exports as the all type of industries were functioning normally and there was no indication that export orders would be delayed.

Aslam said that if political uncertainty continued for period, the it could hurt foreign flows, as the issuance of National Bank of Pakistan GDR had delayed. "Obviously, everything here hinges on how long the uncertainty continues. We believe the uncertainty will not last for long," he added.

He, however, warned if the current situation lingered on and it led to a backlash from the opposition, this slow down the private foreign fund inflow. This situation could be manageable if Pakistan's external deficit could be financed by reserves, he added.

In that case the country's reserves would draw down and external debt could, in turn, put some pressure on the exchange rate, he predicted. "As things stand, we expect Pakistan's macro environment to remain stable and GDP growth to remain at 6.9 percent, driven by domestic consumption," he said.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

World Bank reassessing poverty reduction efforts ​

ISLAMABAD (November 09 2007): The World Bank is reassessing Pakistan's performance for poverty reduction to prepare the policy on future financing. A three-member mission headed by Miss Situ Kohkonen is currently in Islamabad to hold meetings with the officials working on poverty reduction programme and senior policy makers of the government.

The mission is collecting fresh data on jobs to unemployed and other steps taken by the government for better income to underprivileged section of the society.

The mission on Thursday held separate meetings with senior officials of the Economic Affair Division (EAD) and Planning Commission and took up poverty reduction measures. The mission is also scheduled to meet the Prime Minister's Advisor on Finance, Dr Salman Shah and senior officials of the Ministry of Finance and Privatisation Commission.

An Islamabad-based official of the World Bank told Business Recorder that the mission was collecting data on poverty for preparing its report besides discussing the steps taken by the government during meetings with the officials.

The official said the mission would review the fresh data provided by the government and consume for its strategy to be suggested to Pakistan to help reduce poverty rate.

Despite repeated claims of the authorities that poverty reduction was more than 10 points, donors doubt the ratio and want the government to take more concrete steps to further cut down poverty and improve the living standard of the people.

The mission will also have a meeting with the officials of the Privatisation Commission to know what percentage of privatisation proceeds were being spent on poverty reduction.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Pakistan targets $3.5 billion privatisation proceeds in fiscal year 2007-08 ​

ISLAMABAD (November 09 2007): Federal Minister for Privatisation and Investment, Muhammad Wasi Zafar said on Thursday that Pakistan has targeted US $3.5 billion through privatisation of public sector entities in FY 2007-08.

He stated this while talking to a group of economic media persons here on Thursday. The target achieved for privatisation proceeds for FY 2006-07 was US $2 billion, he remarked. He disclosed that during the current year (2007-08) from July to November an amount of US $440.597 million equivalent to Pak Rs 26.869 billion have been received through privatisation proceeds by the Privatisation Commission.

The minister further clarified that an impression had been created in a section of the press that the privatisation proceeds had been stalled, was totally incorrect. Judging from the above stated position, the minister stated that so far US $440.597 million has been received as privatisation proceeds, which was a commendable achievement.

The proceeds relate to UBL GDRs (US $85 million), HBL IPO (US $196 million - Rs 12 billion), Etisalat tranche (received on 7th of November) for PTCL privatisation (US $133.217 million) and Rs 1.6 billion from other privatisation proceeds, which have been deposited into the government account. He further stated that the total target for the year 2007-08 was around US $3 3.5 billion and hopefully this target would be achieved.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

$1 billion container terminal to serve as transshipment hub: President ​

ISLAMABAD (November 09 2007): President General Pervez Musharraf on Thursday said the construction of one billion dollar Deep Sea Container Terminal at Karachi would turn the country into a major transshipment hub for the regional countries, further bolstering Pakistan's trade and commerce.

Addressing after the signing ceremony between the Karachi Port Trust and the Hong Kong based Hutchison Port Holdings limited (HPH) here at the Aiwan-e-Sadr the President said the government has also decided to set up facilities for ship building and repair at the Gwadar deep sea port.

He said Pakistan will be one of the few countries of the region that will not only provide ship building but also repairing facilities and deep sea container terminal that can accommodate some of the largest ships operating. The President said Pakistan serves as a hub for trade between the Central Asian Republics, Western China, Middle East, Africa, and Europe.

He said the country's strategic location would be used for trade and commerce, which will not only be beneficial for Pakistan but for the entire region as well. "Pakistan will be on the world map of ship building, repair and deep sea container handling in three to four years time," President Musharraf said.

The Pakistan Deep Water Container Port Project (PDWCP) will have ten drafts berths at 18 meters depth, of which four will be completed in the first phase by 2010 and will have a terminal capacity of 3.1 M TEUs.

The over one billion dollar project will have a 457 million dollars of Foreign Direct Investment, while the rest of the investment of 550 million dollars for development of infrastructure for Phase-I will be made by the Karachi Port Trust.

Chairman Karachi Port Trust Vice Admiral Ahmad Hayat giving an overview of the project also assured a minimum royalty payment of 1.1 billion dollars to the KPT over the 25 year concession period. He, however, pointed out that the total expected income stands at over 3.5 billion dollars over the same period.

He said the ten berths will be spread over an area of 5 km, and the first vessel is expected to sail into the new terminal by 2010. He said it will also have a road and rail link with the rest of the country including a proposed cargo village.

The Chairman KPT said under this public-private partnership the Build-Operate-Transfer concession would be for an initial period of 25 years and the Hutchison Port Holdings limited (HPH) will be required to develop the site into a full fledged modern container terminal.

He said the port will be able to handle the longest and the deepest vessels that may traverse the seas and added that in Phase I, the terminal will be able to handle Super Post Panamax Container Ships.

The HPH is one of the world's largest container terminal operator and handled 59.1 M TEUs world-wide, of which 13.1 M TEUs were transshipment and operates 257 berths in 45 ports in 23 countries. Earlier, the President witnessed the signing ceremony. Chairman KPT Vice Admiral Ahmad Hayat and HPH's representative John Edward Meredith signed the documents. Minister for Ports and Shipping Babar Khan Ghouri and other ministers attended the ceremony.

Business Recorder [Pakistan's First Financial Daily]

 

[Spring Onion]

10.65 million new jobs created over last six years: Dr Ashfaq


ISLAMABAD: Strong economic growth on sustainable basis created enormous job opportunities and over the last six-year (2000-2006), the economy created 10.65 million new jobs while during the previous years (1994-1999) the economy could created only 4.6 million new jobs.This was stated by Special Secretary Finance and Director General Debt office, Dr Ashfaq Hassan Khan in an exclusive interview with APP here Friday.
He said that over 1.0 million jobs have been created in Information Technology (IT) and Telecom sector alone in the last three years.
"Pakistan's economic performance over the last several years has been impressive and sound macro-economic management and wide -ranging structural reforms have contributed to high real GDP growth, a reduction in the debt burden, and an improved business climate", Dr Ashfaq said. He said that adherence to pro-poor policies has helped lower poverty rates and enhanced the income of the people.
Dr Ashfaq said that real GDP growth accelerated to an average of 7.0 percent per annum over the last five years which put Pakistan in the league of the fastest growing economies of the Asian Region.
He added that as a result of strong economic growth , over US $ 16 billion Foreign Exchange Reserves, stable exchange rate and declining debt burden, the investment climate in the country has improved and Pakistan has attracted US $ 8.4 billion foreign investment in 2006-07. Dr Ashfaq Hassan Khan said that strong economic growth implies greater availability of tax revenues and in the last 8-year (1999-2000 to 2006-07), the Central Board of Revenue (CBR) collected an additional tax revenue of Rs.538 billion while it took 9-years to collect additional tax revenue of Rs.197 billion.
He said that higher economic growth also more than doubled the country's per capita income which was an indicator of the average level of prosperity.
He said that per capita income increased from US $ 438 in 1998-99 to US $925 in 2006-07 which was an increase of 111.2 percent in 8 -years.
Dr Ashfaq said that increase in the per capita income along with enormous job creation led to sharp reduction in poverty.
"In 1998-99 30.6 percent people were living below the poverty line. In 2004-05 only 23.9 percent people living the poverty line", he remarked.
He said that economic recovery of the last several years has not only created more jobs and reduced poverty but it has also improved the living standards of the people.
He added that rising level of the economic prosperity is reflected by the living conditions of the people.
He added that the number of households living in one room homes have declined significantly and all those living in 2-4 rooms homes have increased substantially.
He said that over 38.0 percent households were living in one-room homes in 1998 and in 2006-07, 24.3 percent households were living in one-room homes.
Dr Ashfaq said that the percentage of households living in 2-4 room homes increased from 55 percent in 1998 to 69.1 percent in 2006-07.
On the otherhand, he said the percentage of the households living in 5 and more rooms remained more or less at 1998 level during the same period.
He said that this is yet another indication of the growth of the middle class adding that middle class generally lives in 2-4 room houses and almost 14 percentage points increase in the households living in 2-4 room houses clearly shows the growing size of middle class and the rising level of economic prosperity in the country.
"Today 86 percent owned houses as compared to 81 percent in 1998, 86.6 percent people use electricity as sources of lighting as compared with 70.5 percent in 1998, similarly 30 percent people use gas as cooking fuel as compared to 20.2 percent in 1998.
Dr Ashfaq Hassan Khan said that 36 percent people use tap water as major source of drinking water as compared with only 26 percent in 1998-99.
Furthermore, he said gross enrollment at primary level increased substantially from 71 percent in 1998-99 to 91 percent in 2006-07.
He further said that electric fans production increased by 102 percent during 1999-2007.
Pakistan, he said used to produce 3 million electric fans a year in 1999 and also use to export 50,000 electric fans and today the Electric fan industry is producing over 6 million electric fans and exporting 2 million fans.
The Special Secretary to Finance Ministry said that the availability of electricity even far flung rural areas has enable the poor and lower middle class to buy electric items such as electric fans, deep freezers, refrigerators and television sets.
The production of television sets has increased from 128,000 in 1998-99 to over 900,000 today, he remarked.
This, he said also suggests that the benefits of the economic growth are trickling down to the lower level as many poor are joining the ranks of middle class.
Dr Ashfaq said that number of cell phones (an indicator of the level of prosperity) increased from 0.2 million in 1998-99 to 69 million by September 15,2007) adding the cellular phone density increased from 0.19 percent to 43 .0 percent in same period September 15.
He said the rich in Pakistan always possessed cars and the country could produce 32,000 cars in 1998-99 and today, the middle class is in a position to afford cars and as such the number of cars produced in 2006-07 increased to around 200,000.
Dr Ashfaq said that the middle class generally could afford motorcycle in Pakistan and accordingly the country produced 43167 motorcycles in 1998-99.
Today, he said the size of the middle class has grown and the country has produced 839,224 motorcycles in 2006-07 which suggests that poor person who use to afford bicycle are now affording motorcycles and in other words the poor have graduated to middle class.
Accordingly, he said the number of bicycles produced in the country has declined from 504,000 to 486000 during the same period. - APP

 

[Spring Onion]

Chines Bank to provide $100m credit line to NBP


BEIJING: The China Development Bank (CDB) here Friday signed a MoU with NBP to provide US$ 100 million credit line to NBP for project financing in Pakistan.
The credit line, according to NBP sources here, would be utilized for financing projects in power, fertilizer, chemical, telecom, oil and gas and infrastructure.
Both banks have also agreed to identify viable projects in Pakistan to be financed jointly.
The Credit line will be available to NBP next month and the tenor of credit line is 8 year. The MoU was executed by SEVP of NBP Shahid Anwar Khan and General Manager of CDB Xia Qiang.
It may be noted that the NBP and CDB have been cooperating with each other since 2005 following its Chairman Chen Yuan visit to National Bank of Pakistan (NBP) head office where he held meeting with its President Ali Raza.
Shahid Anwar Khan, speaking on the occasion pointed out that the execution of MoU shows CDB’s long term commitment towards development of Pakistan’s industrial sector in partnership with NBP.
The CDB is one of the three largest State Policy banks of China and NBP is largest and most profitable commercial bank of Pakistan. - APP

 

[Neo]

Confidence-building measures ​

Brokers ask Aziz to abolish Capital Gains Tax, lift CFS cap

Saturday, November 10, 2007

KARACHI: The leading brokers and KSE board of directors on Friday proposed to the prime minister to abolish or at least further extend imposing of Capital Gains Tax on shares business to restore investors’ confidence that has sank after proclaiming of emergency rule in the country.

This proposal was made at a meeting held at Governor House. The meeting was summoned by Shaukat Aziz Prime Minister of Pakistan to take brokers community into the confidence following the proclamation of emergency rule in the country.

Aziz asked brokers to send their verbally proposed Confidence Building Measures (CBMs) in writing including CGT exemption, which brokers said they would do so in a day or two.The period of CGT exemption is to expire on June 30, 2008. The representatives of the stock exchanges have, therefore, requested PM to abolish capital gain tax in shares business forever or extend the exemption date at least for a further period, Arif Habib, former chairman-KSE informed.

To make their argument acceptable, brokers cited that there was no capital gain tax imposed in the regional equity markets including Singapore, Malaysia, Hong Kong, Sri Lanka and etc.Among the other proposed confidence building measures, the enhancing of existing official cap on Continuous Funding System (CFS), which is currently set at of Rs55 billion, would also give its immediately result in setting equity market back on track, Dawood Jan Muhammad, member-director of KSE board told.

He added that meeting also discussed the early introduction of CFS MK-II product by SECP in the market, which would be providing the unlimited liquidity in leverages market.After attending this meeting, Razi-ur-Rehman, Chairman, Securities and Exchange Commission of Pakistan (SECP) told to The News that Commission had almost finalized the CFS MK-II product and would launch it within next four to six weeks, he replied and added that a fewer modalities in this regard would be finalized on Saturday in another separate meeting between SECP and KSE brokers.

The brokers and bankers also requested prime minister to enhance the cap of 20 per cent of banks capital investment in the equity markets. On the other hand, Aziz urged the representatives of banks to play their active part in improving the local bourses and appear active in accumulations of stocks in the current situation, sources disclosed.

Brokers also demanded of the government to bring the Demutualisation Ordinance 2007 in place to speed up corporatisation and demutualisation process. The meeting, however, did not discuss the KSE worst ever performance recorded on November 05, which SECP had ordered to probe in black Monday, nor took up the issue of withdrawal of funds from the equity and financial markets by the overseas fund managers.

Shaukat Aziz ensured the meeting participants that the next general elections would be held by February 2008. They (brokers) would hear a couple of other good news in this regard including the announcement of elections schedule in two to four days, sources said.

Justifying the imposition of emergency rule in the country, Aziz told the meeting that to control the law and order situation and to keep the democratic process in transition it had become compulsory to do so.

Primer praised the economic performance and remained confident to achieve the set target of seven per cent GDP growth this fiscal year despite historical price-hike in the international oil prices and added that Pakistan has sufficient forex reserves to deal with the situation.

Dr. Shamshad Akhter, Governor of State Bank of Pakistan; Dr. Salman Shah, Advisor to PM on Finance; officials of National Investment Trust (NIT), Financial Institutions and other banks were also among the meeting attendees, it was learnt.

Confidence-building measures

 

[Neo]

10.6m jobs created in seven years: Dr Ashfaque ​

Saturday, November 10, 2007

ISLAMABAD: Strong economic growth on sustainable basis has created enormous employment opportunities as over the last seven years (2000-2006) the economy generated 10.65 million new jobs. In comparison, the economy could create only 4.6 million jobs during the period 1994-1999.

This was stated by Special Secretary Finance and Debt Office Director General Dr Ashfaque Hassan Khan in an exclusive interview with APP on Friday. He said over one million jobs had been created in the information technology and telecom sector alone in the last three years.

“Pakistan’s economic performance over the last several years has been impressive and sound macro-economic management and wide-ranging structural reforms have contributed to high real GDP growth, a reduction in debt burden and an improved business climate,” Dr Ashfaque said.

He said adherence to pro-poor policies had helped lower poverty rate and enhanced the income of the people. Dr Ashfaque said real GDP growth accelerated to an average of seven per cent per annum over the last five years which put Pakistan into the league of fastest growing economies in the Asian region.

As a result of strong economic growth, over US$16 billion foreign exchange reserves, stable exchange rate and declining debt burden, the investment climate in the country improved and Pakistan attracted $8.4 billion foreign investment in 2006-07, he added.

He said strong economic growth implied higher collection of tax revenues and in the last eight years (1999-00 to 2006-07), the Federal Board of Revenue (FBR) collected additional tax revenues of Rs538 billion.

He said higher economic growth also more than doubled the country’s per capita income, which was an indicator of average level of prosperity. He said per capita income increased from $438 in 1998-99 to $925 in 2006-07, a rise of 111.2 per cent.

Dr Ashfaque said increase in per capita income along with enormous job opportunities led to sharp reduction in poverty. “In 1998-99, 30.6 per cent people were living below the poverty line. In 2004-05, only 23.9 per cent people were living under the poverty line,” he remarked.

He said economic recovery of the last several years not only created more jobs and reduced poverty, but it also improved living standards of the people. He further said electric fans’ production increased by 102 per cent during 1999-2007. Pakistan, he said, produced three million electric fans in 1999, of which 50,000 fans were exported, but today the electric fan industry is producing over six million fans and exporting two million.

10.6m jobs created in seven years: Dr Ashfaque

 

[Neo]

Economy on solid base: PM ​

Saturday, November 10, 2007

KARACHI: Prime Minister Shaukat Aziz said on Friday that the government’s consistent and transparent policies have established the economy on solid foundation while attracting substantial investment in the country both from local as well as foreign investors.

Talking to a delegation of Overseas Investors’ Chamber of Commerce and Industry at Governor’s House, the premier said as a result of reform agenda and macroeconomic policies the rate of investment has reached all-time high and foreign investments this year hit the level of $8.4 billion.

He said a strong economy has spawned an ideal climate for investment in the country. The reform agenda had been widely acclaimed by multi-lateral institutions and the investors’ community, he said adding that the robust economic backdrop presents a strong case for investment in the infrastructure of the country.

“Our strategy for improving investment climate in the country is multi-pronged marked by financial sector taxation reforms, dismantling of archaic procedures, better enforcement of civil contracts, documentation of property rights, infrastructure development and above all ensuring consistency and continuity of government policies.”

He said because of high growth during the last five years and expansion in various fields the middle class is rapidly growing and demand for consumer goods is increasing. He said the country offers vast investment opportunities in energy, oil and gas, mining, engineering, automobiles, infrastructure development, information technology and telecom, financial and agriculture sectors.

Economy on solid base: PM

 

[Neo]

15pc decline in export of rice, carpet​

ISLAMABAD, Nov 9: Pakistan’s export of traditional products — rice, carpet, leather, engineering and footwear — declined by an average 15 per cent during the first quarter (July-September) of the fiscal year 2007-08 over the corresponding period of last year.

Official figures, compiled by the commerce ministry, showed that export of these products would remain short of the respective targets announced in the last trade policy as the same products from other countries, including India and China were replacing Pakistani products in the international market.

The commerce ministry has turned blind eye to these sectors, as focus of government’s policies was just to doll out subsidies to textile sector for the last two-and-a-half years.

While exports from these sectors were steadily on the decline, many industries providing jobs to thousands of people were either declared sick or closed operation.

The statistics showed that negative growth in export of these products in the first two months (July-August) was around 10 per cent this year over the same period last year.

This indicates that percentage decline in export of these products will grow further in the months ahead if government did not take any remedial measures.

Product-wise details showed export of rice dipped by 2.41 per cent during the first quarter of the current fiscal year over last year.

Of these, export of non-basmati was down by 39.05 per cent. However, export of basmati rice rose by 20.53 per cent due to greater demand of the commodity in international market.

The carpets, rugs and mats exports recorded a negative growth of 4.23 per cent; and leather goods (garments and gloves) by 18.42 per cent during the period under review over last year.

Of the leather goods export of leather garments declined by 2.43pc, leather gloves 53.21pc and other leather manufacturers 42.55 pc.

Export of footwear declined by 6.92 per cent during the months of June-Sept 2007 over same months of last year. Of these, export of leather footwear dipped 17.43 per cent, canvas footwear 40.16 pc. However, other footwear recorded a growth of 79.08 per cent.

The statistics showed that export of engineering goods declined by 12.71 per cent, auto parts 24.51 per cent, furniture 13.72 per cent during the period under review over last year.

A further analysis showed that export of surgical instruments and medical equipment increased by 8.97 per cent, cutlery goods 44.56 per cent, gur and gur products 18.42 per cent, cement 0.19 per cent, molasses 18.37 per cent, jewellery 254.53 per cent, and gems 201.23 per cent during the period under review over the last year.

The export of sport goods was up by 7.53 per cent during the period under review over last year.

Of these, export of footballs increased by 16.80 per cent and gloves 184.74 per cent. However, export of other footwear declined by 50.06 per cent during the same period.

Among the primary commodities, export of fish products declined by 24.36 per cent, fruits 6.84 per cent, leguminous vegetables 29.27 per cent, tobacco 7.12 per cent, and all other items 59.51 per cent. However, export of vegetables was up by 88.81 per cent, spices 1.99 per cent, oil seeds 84.78 per cent, and meat 72.98 per cent.

15pc decline in export of rice, carpet -DAWN - Business; November 10, 2007

 

[Neo]

Lack of shipping ‘industry’ in Pakistan: Foreign shipping firms handle 95% of trade​

KARACHI: Despite having a full-fledged Ministry for Ports and Shipping, with a minister and a secretary, the government has not yet declared shipping business as an ‘industry’, a leading shipping agent told Daily Times on Friday.

A leader of Pakistan Shipping Agents Association (PSAA), who is also a life member of FPCCI and SAARC Chambers, who requested not to be named, told this scribe that Pakistan’s current trade volume was about $50 billion per annum with imports worth $30billion and exports around $18 billion.

“Only five percent of the trade volume was being handled by domestic shipping businessmen while the remaining 95 percent was being handled by foreign enterprises,” he said. The annual approximate freight charges are of about $12.5 billion.

“Foreign shipping companies have 95 percent of the market share while the Pakistan National Shipping Corporation (PNSC) gets just five percent,” he said, adding that this is because PNSC has got only 12 to 15 cargo ships, which all are outdated and have reached their scrapping time.

PNSC chiefs, he said, were nominated from Islamabad and mainly hailed from the armed forces were incompetent as they lacked the technical knowledge involved in the shipping business.

He said during 1970s, there were some 70 to 80-cargo ships with PNSC and private businessmen but after being nationalised, the private sector is reluctant to remain involved in the shipping business.

Detailing the deteriorating conditions of the shipping sector, he said the shipping sector is not considered for bank credit like other businesses in Pakistan. A cargo ship normally costs up to $30 or $40 million. Oil business forms a large part of the chartering business but the government had given the PNSC with the ‘first right of refusal’.

The PNSC could not take up the entire load of the business therefore foreign chartering services take up oil shipments. The government should allow level-playing field to all hands in shipping business but unfortunately the case is quite opposite to the needs of domestic businessmen.

The Karachi Shipyard and Engineering Works (KSEW) has not manufactured more than eight ships since 1960, when it was set-up. Like other institutions related to the shipping business, KSEW too was headed by people not competent to supervise its functioning.

He said government should privatise the PNSC but the process of privatisation must be neat and clean and it should not be given to hands of folklores. It is the need of the hour that the government should invest at least one billion dollars and give the shipping business the status of industry.

Coming to the Karachi Port Trust (KPT), he pointed out that the KPT Chairman, Vice Admiral (Retd), Ahmed Hayat has been incumbent for the last seven years although the official tenure for a single chairman was limited to three years.

“A few of KPT berths had collapsed in early of August this year due to lack of proper care. Unfortunately, the KPT is engaged in developmental works outside the port area, making roads and under passes to please others. The KPT needs to be modernised, as it is the backbone of economy,” he felt.

It is worth mentioning here that the shipping business was limited to only a few players and the Parsi community was mainly engaged in the business with just two or three ships in 1947. The PNSC was established in 1960s. The number of ships in both PNSC and private sector were around 90. In 1972, the government nationalised all private ships. At present, some 60 businessmen are in shipping business directly while it becomes about 100 when those who are indirectly linked to shipping business, are counted. The business employs about 5,000 people directly while 10,000 people serve as its indirect manpower. Major foreign ship chartering companies in Pakistan include MAERSK-SEALAND (Europe), HANJIN SHIPPING (Japan), MALAYSIAN SHIPPING (Malaysia), WOCL (Singapore) and AMERICAN PRESIDENT LINE (USA).

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Development of mining sector: Pakistan seeks assistance from World Bank​

ISLAMABAD: The government has sought financial help from World Bank for the development of mining sector in Pakistan and a delegation of World Bank’s Global Mining Group is expected to visit Pakistan next week.

A high level official of Petroleum and Natural Resources Ministry told this scribe that World Bank’s Global Mining Group works to provide funding for mining sector and renewable energy including wind, solar, biomass, geothermal, hydropower and energy efficiency projects. Official said Pakistan may enter into an agreement with the World Bank Group regarding the financing for mining sector and Petroleum and Natural Resources ministry has also sought consultation from Finance Division and Law Division in this regard.

Official said the World Bank group would also be asked to finance renewable energy especially for generating coal, solar and wind power in the country.

He said government is fully committed to making the mineral sector in Pakistan one of the most profitable for the country and during the current fiscal year the mining sector has registered a growth rate of 5.6 percent as against 4.58 percent of last year. The increased growth was witnessed due to strong growths recorded in magnetite of 30 percent, dolomite 26.1 percent and limestone 25.2 percent. This sector needs financing and the World Bank Group can play an important role in this regard. “Pakistan may also seek technical assistance for the development of mining sector from World Bank Group,” the official said. Mineral industry in Pakistan shows that over the last few decades this sector has been allocated very small amount as 0.45 percent to 2.46 percent of the total public sector expenditure since first five-year plan reflecting its contribution to Gross National Product (GNP) of just around 0.5 percent. This sector needs more investment and financial as well as technical assistance for the development.

The government has already started various initiatives, which is evident from the discovery and development of world-class copper-gold deposits in Chagai; Balochistan by Australian Firms that would fetch $500 million to $600 million per year during the lives of these mines.

“A delegation of World Bank Group would also visit Quetta where it would be updated about the current status of mining sector in the province of Balochistan,” the official said, adding that the delegation would be briefed about Iron Ores reserviours in Balochsitan that has the potential of 1.7 million tonnes iron ores import costing about Rs 3.2 billion per year. Development of Thar coalfield, one of the largest good quality lignite deposits in the world, on completion, would provide additional source of energy, the official added. The government is also working on exploration of minerals including energy minerals (coal), agriculture minerals (rock phosphate, gypsum), metallic minerals (iron ores, copper, gold, zinc-lead, chromite, and antimony), refractory minerals (refractory clays, magnesite, chromite, silica sand, and dolomite) and glass and ceramic minerals (kaolinchina clay, nephyeline syenite, silica sand).

Daily Times - Leading News Resource of Pakistan

 

[Always Neutral]

Lack of shipping ‘industry’ in Pakistan: Foreign shipping firms handle 95% of trade​

KARACHI: Despite having a full-fledged Ministry for Ports and Shipping, with a minister and a secretary, the government has not yet declared shipping business as an ‘industry’, a leading shipping agent told Daily Times on Friday.


Daily Times - Leading News Resource of Pakistan

Dear Neo,

No a good sign as during hardtimes overseas shipping lines will desert / be unreliable. Time for the Govt. to set it right.

Regards

 

[Neo]

Forex reserves rise to $16.372 bln: SBP ​

KARACHI (updated on: November 10, 2007, 15:38 PST): Foreign exchange reserves were slightly higher at $16.372 billion in the week ending on Nov. 3, from $16.354 billion in the previous week, the State Bank of Pakistan (SBP) said on Saturday.

Reserves held by the State Bank of Pakistan rose to $14.166 billion, from $14.119 billion from a week earlier, however those held by commercial banks were to $2.206 billion from $2.235 billion, the SBP said in a statement.

Pakistan's foreign exchange reserves have grown steadily over the past few months because of rising foreign investment inflows and higher remittances from Pakistanis abroad

 

[Neo]

ADB to fund 171 megawatts gas-fired plant near Daharki ​

ISLAMABAD (November 10 2007): The Asian Development Bank (ADB) has approved a gas-fired power plant for Pakistan that would provide additional low-cost electricity to consumers to address the looming power shortage. The project involves development of a 171-megawatt combined cycle low Btu (British thermal unit) gas-fired power plant, which is expected to supply base load power to the national grid.

Btu is a basic measure of thermal energy. The facility will be located in Daharki, District Ghotki, in Sindh, and gas would be supplied from the nearby Mari gas field. The plant would increase the net power generation capacity which should help reduce power demand needed for economic growth. About 60 percent of Pakistan's population has access to electricity from the national grid. The rest use kerosene, wood and other bio-fuels for lighting, cooking and heating.

The project will promote efficient management of natural resources, as it would tap an otherwise idle gas resource and pave the way for low-cost generation given the proximity of the plant to the gas field. The project cost is approximately $200 million, which would be the first 'gas only' plant developed under the 2002 power policy of Pakistan and is expected to begin commercial operations in the fourth quarter of 2009.

A growing population and thriving economy need more power. The average annual electricity demand of Pakistan is currently increasing by 11 percent, with urban areas experiencing significantly higher demand growth. However, power supply is not in conformity with the demand. ADB estimates that Pakistan needs to add about 2,000 megawatts every year to avoid shortages in future.

ADB is a major source of external investment in the energy sector in Pakistan, having provided about one-third of the total external sources. "The proposed assistance is consistent with the energy strategies of ADB and the government of Pakistan.

In addition to its long-term partnership with the government in the power sector arising from its public sector activities, ADB is also, since 1996, providing private-sector loans and investments," said Robert Bestani, Director-General of ADB's Private Sector Operations Department.

ADB has approved an equity investment of up to $2.75 million and guarantee for a $44 million loan for the project holding company. Subject to approval of concerned authorities, both the guaranteed loan and the equity investment will be contributed by the holding company as equity in Foundation Power Co Daharki Ltd, which will own the power plant.

Proceeds from the equity investment and guaranteed loan will be partially used for designing and constructing the project. A consortium of local and international banks has provided $150 million in debt financing for the project.

"In addition to the positive development impacts of the gas-fired power plant itself, the proposed transaction is designed to encourage equity investors to again look at the Pakistan generation sector as an attractive investment opportunity, while not increasing costs for the consumers or the government.

Further, it is designed to draw in future offshore funding for power project financing. Such investments are crucial to complement the government's own efforts in the sector," said Martin Tornberg, an Investment Specialist with ADB.

Business Recorder [Pakistan's First Financial Daily]