Pakistan Economy - News & Updates - Archive

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Reform plan failing to meet objectives: ADB​

ISLAMABAD, Nov 11: The Asian Development Bank-funded $1.8 billion governance-related reform programme is failing to meet its objectives owing to the government’s waning interest. But the nation will continue to pay the price for its failure, according to an internal ADB assessment.

The assessment completed by ADB’s Operation Evaluation Department says that corruption has devolved with the devolution programme and the government priorities towards major governance projects like access to justice, decentralisation support and province-level resource management “now are less clear”.

The final outcome of the reform programme may not be different from the poor results of the Social Action Programme of the 90s, says the assessment.

“When ADB approved the funds, the government strongly needed them to address a fiscal crisis. This is no longer the case,” because the aftermath of the 9/11 resulted in a major increase in funding to Pakistan, said the assessment, adding that technical assistance loans “attached to these programmes generally have failed”. The OED’s final view, however, rated ADB’s own operations in the governance sector between modest and substantial.

Ironically, reasons for failure of technical loans are not clear and appeared to reflect “lack of ownership by executing agencies. Since these technical loans were designed to produce outputs essential for the achievement of outcomes, this is a concern. Essentially, such loans were accepted by the government as necessary condition for gaining access to the much larger policy-based loan funds”.

Even where the assessment noted some successes, it was noted “a decisive influence of a few individuals with a vision derived from a theoretical base, good analytical work and effective communication and advocacy skills”.

“That a few key individuals could be so influential is instructive in terms of the importance to ADB and its staff. However, reliance on a few key individuals poses risks – if these individuals depart and are not replaced by those with similar skills, the programme quickly can lose its direction and effectiveness”.

The bank said that Pakistan had been a subject of unavoidable complex consequences of a coherent and interrelated strategy.

The establishment of a governance unit in ADB’s resident mission to support the access to justice programme and decentralisation support programme, but not the resource management programmes, was a positive move in terms of committing resources, although the structural separation from the unit responsible for the administration of delegated projects is questionable, said the report.

Another potential risk, according to the bank, is that ADB could outpace the government’s commitment, turning a government-led programme into an ADB-led one.

The experience of the Social Action Programme in the 1990s is instructive. “Some evidence suggest that history is repeating itself – namely, that client interest and demand has waned and the development partners have started to ‘own’ and lead what was a government programme.”

The bank said that a paradox of the decentralization support programme is that, as vertical project – managed at the federal level with provincial programme management units – its management structure was not consistent with its purpose i.e. support to the local governments.

According to the bank, one real problem with the situation is that it is not clear what follows the access to justice or decentralization programme have never been widely shared. Devolved social services programme and resource management programme have been replicated in all provinces but again the longer-term strategic direction is unclear, even in broad conceptual form.

The assessment says that much of ADB’s programme and those of other funding agencies has continued to circumvent the principal means designed for channelling resources to local governments – the provincial finance commissions. This has two dimensions: the special grants that bypass the provincial finance commissions and vertical projects.

Likewise, the federal programmes like Access to Justice and decentralisation support have suffered because of variable performances of provinces. Poorly performing provinces have held up tranche releases, thereby penalising the better performers.

Reform plan failing to meet objectives: ADB -DAWN - Top Stories; November 12, 2007

 

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$5 billion Khalifa Coastal Refinery at Gwadar: implementation agreement signing on November 13 ​

ISLAMABAD (November 12 2007): Pakistan and Abu Dhabi's International Petroleum Investment Company (IPIC) management are going to sign an Implementation Agreement (IA) on November 13, for setting-up a $5 billion Khalifa Coastal Refinery (KCR) at Gwadar.

As per IA, IPIC and its partner, PARCO will complete KCR by 2012. The refinery will help Pakistan meet its local demand and export the rest of refined petroleum products.

Earlier, KCR was supposed to be granted the right to export 100 percent refined petroleum products. However, at the last stage of the negotiations the government managed to persuade IPIC and PARCO for amending the basic principle. The amended agreement provides that KCR will meet Pakistan's demand of petroleum products and export only surplus production.

An official told Business Recorder that IPIC and PARCO have agreed to provide Pakistan as much refined petroleum product as it needs from KCR and export only surplus production. They term it as a good development since the new arrangements will help Pakistan meet its growing petroleum products needed in the future. KCR is a joint venture of IPIC and PARCO with 74 and 26 percent shares respectively.

An IPIC delegation headed by managing director Khadem Al Qubashi is scheduled to reach Islamabad on Monday to sign KCR IP. Petroleum secretary Furrukh Qayyum will sign KCR IP on behalf of government of Pakistan. The ceremony is being arranged in a local hotel for the purpose. Prime Minister Shaukat Aziz will witness the signing.

This is very important development as a strong group like IPIC is coming to Pakistan with multibillion dollar investment. Pakistani authorities hope that International Petroleum Company's coming into Pakistan with huge investment will woo many other bigger investors to Pakistan for investment.

The Economic Coordination Committee ECC of the Federal Cabinet had approved a special package of concession in taxes and duties in its meeting held on October 10. The package promises tax exemption for KCR for 20 years. This was followed by a two member official delegation visit comprising Petroleum Secretary, Farrukh Qayyum and Director General Oil, G.A. Sabri visit to Ahu Dhabi from October 27 to 29. The delegation finalised modalities for IA signing. The official delegation presented the details of IA and outcome of its negotiations with IPIC management to the federal cabinet in its last meeting for endorsement.

Business Recorder [Pakistan's First Financial Daily]

 

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$130 million outflow from SCRAs in two days ​

KARACHI (November 12 2007): Dollar 130 million were withdrawn in two days as the outflow in portfolio investment from the country's equity market continued during the week ended on November 10. As a result, the SCRAs balance declined to $223 million at the end of the week from $353 million as on November 6.

"The prevailing uncertainty on political front after imposition of emergency and law and order situation in different parts of the country made foreign investors panicky and they opted to offload their holdings", Ahmed Nabeel, COO at JOV & Co said. However, he said he was optimistic that the situation would improve after the announcement of the schedule of general elections. The outflow of over $130 million was mainly by UK, USA and Hong Kong investors.

According to State Bank of Pakistan (SBP) data, there was outflow of $43.695 million on November 8 and over $86 million a day earlier.

USA $28.339 million, UK $10.555 million, and $5.94 million by Hong Kong investors. Australia withdrew $541,848, UAE $510,651, Germany$120,036, and Singapore withdrew $2,105. On the other hand, fresh inflow of $2.320 million was witnessed from Saudi Arabia on the last day of the week.

Business Recorder [Pakistan's First Financial Daily]

 

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Air Blue places $700 million orders for 14 A320-200s ​

KARACHI (November 12 2007): Pakistan's fastest growing private sector carrier, Air Blue, has placed orders worth $700 million for purchase of 14 new A320-200 aircraft. This is the second largest order for outright purchase of brand new aircraft after national carrier PIA's $1.2 billion order placed in 2005 for purchase of eight Boeing aircraft--three 777-ER-200, three 777-ER-300 and two 777-LR-200.

There is, however, a marked difference in the purchase of aircraft by Air Blue and PIA, as the government had to provide sovereign guarantee to the Eximp Bank for the purchase of aircraft by PIA, and the private sector carrier Air Blue provided only Company's guarantee.

Shahid Khaqan Abbasi, Air Blue Chief Executive Officer, told Business Recorder here on Saturday that a formal agreement for the purchase of 14 new A-320-200 would be signed between Airbus Industrie and Air Blue in Dubai on November 13 during the five-day air show, which started on November 11. The Airbus Chairman Industrie would sign the agreement on behalf of the aircraft manufacturer and Shahid Khaqan Abbasi would sign on behalf of Air Blue .

Abbasi left for Dubai late on Saturday afternoon to attend the air show and to sign the agreement.

He said that the first A320-200 aircraft would be delivered in July, 2009, and thereafter one aircraft would be delivered after every three months thus completing the delivery of 14 aircraft by the end of 2012. Following induction of the new aircraft, the Air Blue fleet at present comprising three A-320s and three A-321s, which are on lease, would be returned to the lessor companies.

About the financial health of Air Blue, Abbasi said that from the word 'go', three years back "we have not, for once looked back". Despite the fact that Pakistani carriers, to cover up their failures, have been crying hoarse about the galloping increase in fuel prices, Air Blue, he said, had posted profits year after year in the face of high fuel costs and other expansion expenses.

The annual accounts, which are now being audited, would be announced by the end of next month, Abbasi said, adding that the airline would end up with a profit of around Rs 150 million and a 20 percent return on equity.

He said that Islamabad to Manchester Air Blue flights have proved a roaring success. The seat occupancy, both ways, has been hundred percent, although high season has not yet started, he added.

Similarly, he said, Dubai flights were also doing good business. About future expansion plans, he said that once the new aircraft are inducted into the airline, "we would expand towards West as well as East ie, Europe, Middle East, India, Bangladesh, Malaysia and Thailand would be our future destinations."

Business Recorder [Pakistan's First Financial Daily]

 

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Medium and long-term outlook for investment attractive: Prime Minister ​

ISLAMABAD (November 12 2007): Prime Minister Shaukat Aziz said the medium and long-term outlook for investment in Pakistan is very attractive due to the reforms undertaken by the government as well as the transparent policies introduced during the last eight years.

The Prime Minister said this while talking to a group of investors including Waqar A. Malik Chief Executive, ICI and Hasib Rehman, CEO Ayesha Steel Mills, who called on him at the PM's House here on Sunday.

The Prime Minister said we have encouraged private sector investment to take advantage of the improved macro-economic situation in Pakistan as a result of which the level of investment has expanded rapidly in the country.

He said in terms of future potential Pakistan's demographic, with 100 million people below the age of 25 out of the total population of 160 million, offers attractive opportunities for growth and investment for private investors.

He highlighted the fact that Pakistan is increasingly becoming a base for skilled people and as such can be used as a regional manufacturing hub for local consumption as well as exports. This, he said, will enable investors to leverage Pakistan's human capital, its location and ease of doing business.

While talking to CEO, Ayesha Steel Mills, the Prime Minister welcomed the fact that it is a major joint venture between Pakistani and Japanese investors.

Shaukat Aziz said that steel is a commodity very much in demand and increased investment in manufacturing will augur well for future growth and development of the country.

He said the infrastructural investments being undertaken by the public and private sectors have increased demand for steel both for industrial as well as construction purposes. He said this will augur well for investments in the steel manufacturing business.

During his meeting with Chief Executive, ICI who have several plants in Pakistan, the Prime Minister welcomed the fact that they are expanding their activities in Pakistan and the various products that they produce including caustic soda, paints and chemicals have grown rapidly and they have taken advantage of the increasing size of the Pakistani market.

The investors appreciated the reforms of the government, the transparent policies and the consistency and continuity of policies which enabled them to invest increased amounts in Pakistan and benefit from the attractive opportunities in the country.

Business Recorder [Pakistan's First Financial Daily]

 

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New industrial zone being set up in AJK ​

MIRPUR (November 12 2007): The government of Azad Jammu and Kashmir (AJK) is planning to establish a new mega-industrial zone soon over an area of 20,000 kanals in Mirpur, official sources said. Sources informed APP that Moori on Mirpur Jatlan Road has been decided as the proposed location for the new industrial zone and the government will acquire state-owned and private land for the reason.

The sources also said that the AJK government was giving due attention towards promotion of business and industrial activities in the region where a conducive atmosphere was already available. The state government intended to provide all possible facilities to the existing and intending entrepreneurs to bring the facilities at par with other parts of the country.

Further the official said that the government also intended to give relief to those industrialists who have to face huge overhead freight charges of transportation of the raw material from various parts of Pakistan to their industrial units operating in AJK. The industrialisation of AJK will help overcoming unemployment and poverty, maintained the official.

Business Recorder [Pakistan's First Financial Daily]

 

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Institutional buying helps KSE recover 232 points ​

Tuesday, November 13, 2007

KARACHI: Strong institutional buying restored equity market back on track following the announcement of general election in January 2008. Active buying in banking and fertilizer sectors was prominent beside sluggish appreciation in the energy and telecom stocks.

KSE 100-share Index posted a handsome recovery of 231.80 points from the previous week steep losses and closed at 13,655.67 points on Monday.

Market opened more than 140 points plus and the trend continued during the session touching 13,701.74 points intra-day high posting a maximum surge of 277.87 points.

Analysts see the 13,700 points level the next psychological barrier in recent times. Smart buying beyond this level might completely change the negative sentiments to positive in the market, but one should not ignore the day-to-day political development in the country, they advised.

The junior 30-Index also surged by 298.86 points and closed at 16,312.57 points. The overall volume in the ready market remained dull at 219.544 million. It, however, was slightly up from 217.513 million shares changing hands on the last working day. The future market turnover declined to 35.445 million shares from previous session of 48.056 million shares.

“The market participants were observing changes in political arena and were also noticing the political statement from the government officials, political parties in race of premier seat and parties in opposition. On the basis of this, equity players drove the conclusion that elections were going to be held definitely in the country in January/February 2008 and appeared aggressive in accumulating the stocks on across the board,” analysts said.

The announcement of election schedule appeared as a ray of hope from the deep political darkness in the country. Market participants welcomed this move from the military man Gen. Musharraf and hoped to see continuation of democratic process from that point at which it was left, said analyst Ahsan Mehanti and added that the clear-cut decision of Commonwealth Ministerial Action Group regarding the cancellation of Pakistan membership, in the backlash of emergency rule, would add its importance to the stocks exchange either way.

Analyst Hasnain Asghar Ali said: “Ignoring the outflow in SCRA numbers, bearish sentiment in regional and international markets and the statements by certain international organizations, the local markets staged a forward march.”

Developments that took place over the weekend, starting from proposals made to the premier by the brokers and commitment by the former on considering them (i.e. extension in capital gain tax exemption for period of 5 years in shares and uncapping of CFS) coupled with developments on political side, mainly the announcement of election period as it has put the country back on road to democracy in its full essence, he added.

Major portion of buying was set in banking sector as almost all the major and low tier scrips contributed in the rally. NBP was the front runner, gained the appreciation of almost four per cent and MCB also moved on the same direction and closed with the appreciation of three per cent, said analyst S. Kashif Mustafa.

E&P sector played silent role but somehow supported the index at higher levels. High activity was seen in OGDC closed with the appreciation of just Re1 only. Other participants also remained silent and did not contribute in the rally, he added.

High activity was also witnessed in telecom sector; high speculation was seen in TRG as over 21.5 million shares were traded, on the other side disappointing results of CTTL cluttered the bullish sentiment of retailers as it showed negative earning in its year-end results, he further said.

The plus sing dominated on board, as 255 stocks advanced against 82 declined, while the value of 29 scrips remained unchanged with total 366 active counters on board.

Highest volumes were witnessed in TRG Pakistan at 21.549 million closing at Rs13.50 with a gain of Re1, followed by Oil and Gas Development Company at 14.064 million closing at Rs116.90 with a gain of Rs1.05, National Bank at 13.730 million closing at Rs239.25 with a gain of Rs9.25, Attock Refinery at 12.414 million closing at Rs280.20 with a gain of Rs12.20 and Pak Petroleum at 7.835 million closing at Rs251.45 with a gain of Rs1.40.

Institutional buying helps KSE recover 232 points

 

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Exports miss target by $350 million in Jul-Oct​

ISLAMABAD: Pakistan’s exports remained $350 million short of target during the July-October period of this fiscal year, as the country exported goods worth $5.865 billion as against the target of $6.210 billion for the period.

A senior official at Trade Development Authority of Pakistan (TDAP) told Daily Times on Monday that although the monthly targets are indicative in nature, these are set to examine the trade performance during the on-going fiscal year.

For the month of October, the export target was set at $1.438 billion and against this the actual exports during this month stood at $1.408 billion, leaving a shortfall of $30 million. Exports are targeted to grow by 8-10 percent in the current fiscal year. However, growth in exports was only 6.33 percent in the first four months.

According to the data released by the Federal Bureau of Statistics, goods worth $5.865 billion were exported during the July-October period of this fiscal year as compared to export of goods worth $5.515 billion in the same period of last fiscal year 2006-07, showing a growth of only 6.33 percent.

Value of total imports of the country jumped to $11.443 billion during July-October period of this fiscal year as compared to the imports worth $9.557 billion in the same period last fiscal year, showing an increase of 19.74 percent.

The Ministry of Finance has said in its analysis released recently that import growth appears to be on the path of moderation and is expected to be in the range of 6.5 percent to 7.0 percent in the current fiscal year.

The country suffered a trade deficit of $5.578 billion during July-October period of on-going fiscal year as against the deficit of $4.041 billion same period last fiscal year, showing an increase of 38 percent.

Exports during October 2007 stood at $1.408 billion as compared to $1.262 billion in October 2006, showing a growth of 11.59 percent. However, imports during October this year grew by 38 percent to reach $3.358 billion as compared to $2.131 billion in October 2006. Trade deficit in October 2007 stood at $1.976 billion as compared to the deficit of $868 million in October 2006, with an increase of 127 percent.

Daily Times - Leading News Resource of Pakistan

 

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Oil and gas production up by 7.2 percent in Q1 FY08​

KARACHI: Oil and gas production in the country registered a growth of 7.2 percent during the first quarter of fiscal 2007-08.

According to oil and gas production data released by Pakistan Petroleum Information Service (PPIS) here Monday a growth of 12.2 percent and 6.7 percent was recorded in oil and gas respectively during the first quarter of fiscal 2007-08.

The oil and gas production (combined) in the country stood at 694 thousand barrels of oil equivalent per day (kboepd) in 1Q 2008, showing a growth of 7.2 percent.

Local gas production in the period stood at 3.9 billion cubic feet per day (bcfd) against 3.6 bcfd produced during the same period last year. Growth in gas production remained healthy despite decline in production from mature fields, which somewhat offset the production growth of new fields. Similarly, oil production stood at 71.9 thousand barrels per day (kbpd), compared to 64.0kbpd last year – YoY growth of 12.2 percent.

Oil & gas production of OGDC in 1Q 2008 stood at 194.8 kboepd during, against 168.1 kboepd in the corresponding period of 2007. Oil production alone posted an increase of 19.8 percent as it stood at 46.6 kbpd versus 38.9 kbpd in the same period last year. This rise in production was mainly due to commencement of production from Mela-1 and increased oil production from Bobi, Tando Alam and Makori fields. Similarly, gas production stood at 0.9 bcfd, registering an increase of 14.7 percent on year-on-year basis.

In the first quarter of current fiscal, PPL’s combined oil and gas production soared by 5.9 percent and stood at 162.0 kboped from 152.9 kboepd produced during the corresponding period in fiscal year 2007. Gas production during the period registered a growth of 4.5 percent and stood at 1.0 bcfd versus 0.9 bcfd in last year’s corresponding period. This hike in production was mainly led by 72.9 percent and 24.1 percent growth in gas production from Adhi and Sawan fields. However, flat production from Sui field, which contributes around 65 percent of company’s total gas production restricted the growth impact from Adhi and Sawan.

Oil and gas production of POL declined to 13.1 kbpeod in first quarter of fiscal 2007, as against 13.4 kbpeod in the same period last year, posting a decline of 1.8 percent. Gas production registered a marginal increase of 2.7 percent and stood at 0.05 bcfd. On the other hand, oil production registered a decline of 7.1 percent and stood approximately at 5.7 kbpd primarily due to production decline from Pindori field.

However, as per KSE notice issued last week, oil production from the field is now standing at 4,957 bpd. POL management expects the production to further increase by 200-300 bpd, going forward.

Daily Times - Leading News Resource of Pakistan

 

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Pakistan facing shortage of 7m housing units​

* Senate body seeks action against land mafia

ISLAMABAD: The government has estimated shortage of up to seven million housing units that will increase in the coming years, secretary to the Ministry of Housing and Works told the Senate Standing Committee on Housing and Works, which met at the Parliament House on Monday with Senator Dr Muhammad Ali Brohi in the chair.

The secretary said that the annual disbursement of loans by House Building Finance Corporation would be enhanced from Rs 1.2 billion to Rs 7 billion in next five years. The committee demanded the government to take back its land worth billions of rupees from land mafia and initiate strict action against it.

The committee was given a presentation on the National Housing Policy, wherein paucity of the available government land was mentioned as one of the reasons to launch new housing schemes.

It resolved not to let anybody grab the state land and directed the ministry to retrieve 134 kanal of state land, occupied by land mafia in Wafaqi Colony, Lahore, by moving the court and securing cooperation of provincial home department, police and other state-run agencies. It also directed the ministry to obtain rent of government quarters from Punjab Police, which had been occupying them since 1989 in Lahore, and give three months to shift the police station from Wafaqi Colony to proper premises.

The committee members were also concerned over inordinate delay in the renovation and development work at Dargah Sehwan Sharif and termed alleged interferences of district coordination officer of Dadu and administrator of Auqaf in the affairs of its sub-committee a breach of privilege. The committee observed their interferences had delayed the project and affected the overall grandeur and ambience of the shrine by giving it an unimpressive exterior. staff report

Daily Times - Leading News Resource of Pakistan

 

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Abu Dhabi to build $5 billion refinery in Pakistan ​

ISLAMABAD (updated on: November 13, 2007, 14:58 PST): Abu Dhabi signed an implementation agreement on Tuesday to build a $5 billion refinery that will double Pakistan's refining capacity.

Under the deal between Abu Dhabi's International Petroleum Investment Company (IPIC) and Pak-Arab Refinery, the project will be built at Khalifa Point in the Hub district of Balochistan province., about 15 km (9 miles) west of of Karachi.

The Khalifa Coastal Refinery Project will have a refining capacity of between 200,000 to 300,000 barrels per day of middle distillate products.

"It will be a large refinery to meet domestic needs and cater to the export market," said Prime Minister Shaukat Aziz, who witnessed the agreement signing with United Arab Emirates' Energy Minister, Mohammed bin Dhaen al-Hamli in Islamabad.

Abu Dhabi, one of the seven members of the UAE, has a 40 percent stake in the Pak-Arab Refinery at Mehmood Kot in the central province of Punjab.

IPIC, possibly with other UAE government institutions or companies, will hold an initial 74 stake in the Khalifa project, with Pak-Arab Refinery holding the remaining 26 percent stake.

Pakistan, almost totally dependent on oil imports, has an installed refining capacity of 12.82 million tonnes a year (just over 250,000 bpd) from its five refineries.

Pakistan consumes about 15 million tonnes of oil products annually.

Aziz said Pakistan's economy, which has been averaging 7 percent growth annually for the past four years, needed energy and fuel to sustain its growth momentum.

Pakistan's annual energy requirements are expected to surge to 177 million tonnes of oil equivalent by the year 2020 from current needs of about 58 million tonnes.

The Khalifa refinery is expected to be commissioned by December 2012.

The Pakistan government has announced various concessions for the project that includes 20 years tax-free status and up to 1,000 acres free of cost land.

Abu Dhabi to build $5 billion refinery in Pakistan : Business Recorder | LATEST NEWS

 

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16 projects worth Rs 97.9 billion approved ​

ISLAMABAD (November 13 2007): The Executive Committee of National Economic Council (Ecnec) on Monday approved 16 projects costing Rs 97.9 billion in various sectors of economy. The overall foreign exchange component (FEC) has been estimated at Rs 51.7 billion.

The approved projects include Karakoram Highway Upgradation worth Rs 30.9 billion for which China would provide Rs 25.268 billion. The project is of paramount significance for the construction of Bhasha dam, said Planning Commission Deputy Chairman Dr Muhammad Akram Sheikh.

"On behalf of the Planning Commission, I can say that we are on the construction of Basha and all other dams to be built by 2016 in accordance with announcement of President General Pervez Musharraf," he said.

Ecnec meeting, held for the third time in two months, was presided over by Prime Minister Shaukat Aziz. This would be the last Ecnec meeting presided over by Shaukat Aziz, as the National Assembly, according to President Musharraf, would be dissolved on November 15.

The Prime Minister said that in the last eight years, Ecnec had held 27 meetings and approved 649 projects worth Rs 2.4 trillion. That was a record in Pakistan's history and an achievement in itself.

The projects approved by Ecnec in eight years covered all sectors of national economy including 403 projects worth Rs 1903 billion in infrastructure, and 207 costing Rs 466 billion in social and 39 projects worth Rs 72 billion in other sectors.

Briefing newsmen after the meeting, Dr Akram said that Ecnec also approved revision of the bidding and contract documents. This was on the initiative of Pakistan Engineering Council. He, however, gave no reason that forced the committee to change the documents.

According to him, Ecnec approved 11 new projects costing Rs 80.23 billion. The cost of five projects was revised. The cost of the revised projects has been increased from Rs 13.7 billion to 17.7 billion. Muzaffarabad City Development Project of Rs 21.35 billion has also been approved. The project has foreign assistance of 17.62 billion. Apart from this, the cost of Border Security Road Programme Phase I has been increased to Rs 1.15 billion from Rs 840 million.

Most of the 16 projects approved in the Ecnec meeting have got allocations in the overall PSDP 2007-08. The PSDP allocation for most of the projects in the current fiscal year is Rs 4.16 billion. In the earlier two meetings this year, Ecnec had approved 68 projects costing Rs 270.65 billion. Total number of projects so far is 84.

Overall, the Ecnec approved five projects worth Rs 42.55 billion in physical planning and housing sector and one project in energy with cost of Rs 760 million. Four projects worth Rs 17.37 billion pertained to Higher Education Commission (HEC).

Dr Akram said that advisory board comprising Dr Ataur Rahman, Dr Samar Mubarakmand and Dr Akhtar would give advice to the government in which discipline and technology Pakistan should have more graduates so that the shortage of skilled workforce could be overcome. Around 500 projects, or 40 to 50 percent projects initiated in the last years, have been completed. About 15 to 20 projects have cost overrun presently, he said.

Business Recorder [Pakistan's First Financial Daily]

 

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July-October trade deficit widens to $5.578 billion ​

ISLAMABAD (November 13 2007): Pakistan's trade deficit swelled to $5.578 billion during the first four months (July-October) of the current fiscal year, up by 38.03 percent from $4.041 billion over the same period last year. Experts say Pakistan is increasingly becoming an import-dependant country with an expanding list of food items despite being an agricultural country.

They say that surging trade deficit is also the result of unprecedented increase in oil prices which is causing rise in cost of doing business affecting exports. The growing trade deficit, they fear, could intensify the spate of inflation as Pakistan has been importing a number of food items, including pulses, wheat, medicines, and milk apart from machinery and other items.

The trade deficit worsened as exports rose marginally but imports soared at a much higher rate. According to official figures released here on Monday by the Federal Bureau of Statistics (FBS), the export of goods went up marginally to total of $5.865 billion during the first four months of the current fiscal year as against $5.515 billion over the same period last year.

However, exports declined by 5.64 percent over last month, declining to $1.408 billion in October 2007 from $1.493 billion in September last month. Imports increased by 19.74 percent to $11.443 billion during the first four months of the current fiscal year as against $9.775 billion over the same period last year. This high import growth has pushed up trade deficit further.

The government has set an export target of $19.2 billion for the current fiscal year. The State Bank of Pakistan has recently in its report had warned the government that growing current account deficit, led by sharp slowdown in export growth, was posing key challenge to macroeconomic stability in the country.

It may also be pointed out that State Bank annual report is also apprehensive of the debt payment capacity because of galloping in deficit namely trade imbalance and high inflation.

Further analysis of the data showed that on monthly basis the trade deficit surged by 59.09 percent with trade gap increasing from $1.242 billion in September 2007 to $1.976 billion in October 2007. The economic managers seem to be focused more on increasing revenue ratio rather than giving equal weight to all other economic indicators.

Analysts said rising inflation, capital cost and energy prices during the last few years rendered Pak products less attractive for buyers in international market which could be one of the reasons for falling exports during the period under review.

Business Recorder [Pakistan's First Financial Daily]

 

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Euro-Asia Economic Forum: expanding energy, transport linkages to Pakistan urged ​

BEIJING (November 13 2007): Speakers at Euro-Asia Economic Forum have stressed the importance for further expanding energy and transport linkages to Pakistan and beyond to cope with ever increasing energy demand.

There is a great opportunity for expanding and linking the route to Pakistan with the regional countries as the South Asian country is the shortest route to Arabian Sea, Middle East as well as it will provide greater market access for Pakistani products.

The speakers pointed out at the Euro-Asia Economic Forum that was jointly sponsored by the Secretariat of Shanghai Cooperation Organisation (SCO), the SCO Business Council, the United Nations Development Program, the Secretariat of Eurasian Economic Community, China Development Bank and the Shaanxi provincial government.

SCO, a regional organisation founded in 2001, comprises China, Russia, Uzbekistan, Tajikistan, Kyrgyzstan and Kazakhstan, with Pakistan, Mongolia, Iran and India being observers. The forum, mainly focused on cooperation in energy, tourism and education, had attracted 1,400 delegates from more than 20 countries,

A senior official of Pakistan Embassy who was the part of delegation that participated the forum, said that all the participants stressed the need for greater efforts to increase the supply of oil and other energy resources, including electricity through grid stations for Central Asian States and Russia to China.

The keynote speakers, included Chairman of the National Committee of Chinese People Political Consultative Conference Jia Qinglin, while prominent among those who spoke included Secretary-General SCO Bolat Nurgaliev, Former President of Philippines and Chairman of the Board of Directors, Boao Forum for Asia Fidel Ramos, and Former Prime Minister of Kazakhstan Sergey Terechshenko.

The delegates also highlighted the importance of development of Roads and Rail transport between China and these countries. He said that a meeting of the delegates was also held to examine and for financing various projects in Shaanxi province. Another meeting held for financial cooperation in which speakers discussed and appreciate the steps for creation of a Regional InterBanking Consortium, which will finance such projects and stressed the need for further improving the regulation and legal frame work.

Business Recorder [Pakistan's First Financial Daily]

 

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IFIs may not suspend assistance to Pakistan​

13 November 2007

ISLAMABAD — Pakistan government does not believe that due to the promulgation of emergency, bilateral donors and International Financial Institutions (IFI) would suspend the country's assistance.

"I am not a pessimist and believe that as soon as President Musharraf takes oath of his office for the next term, three-fourth of this uncertainty will be gone," said Special Secretary Ministry of Finance Dr Ashfaque Hasan Khan confidently.

"Even if Canada and the Netherlands withdraw $10 million and $7 million assistance it will not make much difference," he told this correspondent. He, however, said that the situation was not all that bad on the economic front as no bilateral donor or any international financial institutions have so far officially communicated anything to the government with regard to suspending their assistance as was widely published in the press.

He was asked to comment on the possible negative impact of the down gradation of credit rating by Moody's International and the Standard and Poors — the two New York based international credit rating agencies. "You must know that there was no down grading as our investment rating remains B-Plus and B-1 by the Standard and Poors and Moody's international respectively. Therefore, there is no change in it and as such it does not warrant any wake up call.

The change is in their future outlook which according to them is not stable and is negative due to the political uncertainty," Dr Khan said who is also the spokesman of the ministry of finance. He was of the view that it was a short term phenomena and was not expected to last many months. Dr Khan said that the emergency imposed by Gen Musharraf was different from that of 90's when assemblies were dissolved and governments dismissed and the whole thing was torn apart. "But today every thing is in tact as the federal and provincial governments are functioning and the assemblies are performing their duties due to which investor's confidence is still very much there across Pakistan".

He said Musharraf's emergency was soft and benign than those of the previous ones and as such will not bring any big harm to the economy.

Khaleej Times Online - IFIs may not suspend assistance to Pakistan